2023 Q4 Form 10-Q Financial Statement

#000149315223040304 Filed on November 13, 2023

View on sec.gov

Income Statement

Concept 2023 Q4 2022 Q3
Revenue $8.578M $13.38M
YoY Change -29.6% 22.88%
Cost Of Revenue $7.193M $7.987M
YoY Change -19.02% 55.24%
Gross Profit $1.384M $5.391M
YoY Change -58.07% -6.12%
Gross Profit Margin 16.14% 40.3%
Selling, General & Admin $5.929M $4.320M
YoY Change 22.18% 7.04%
% of Gross Profit 428.32% 80.14%
Research & Development $2.243M $3.441M
YoY Change -52.0% -8.27%
% of Gross Profit 162.01% 63.84%
Depreciation & Amortization $108.2K $130.0K
YoY Change 90.53% -15.64%
% of Gross Profit 7.82% 2.41%
Operating Expenses $8.172M $7.762M
YoY Change -14.21% -0.34%
Operating Profit -$6.788M -$2.371M
YoY Change 9.07% 15.88%
Interest Expense $196.9K -$2.091M
YoY Change -426.43% 10659.91%
% of Operating Profit
Other Income/Expense, Net $140.8K -$2.094M
YoY Change -13.23% 6540.91%
Pretax Income -$6.450M -$4.465M
YoY Change 5.37% 112.93%
Income Tax $39.00K $36.00K
% Of Pretax Income
Net Earnings -$6.489M -$4.501M
YoY Change 5.39% 111.41%
Net Earnings / Revenue -75.65% -33.64%
Basic Earnings Per Share -$0.07
Diluted Earnings Per Share -$0.06 -$48.13K
COMMON SHARES
Basic Shares Outstanding 114.4M shares 93.64M shares
Diluted Shares Outstanding 93.52M shares

Balance Sheet

Concept 2023 Q4 2022 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $17.40M $14.97M
YoY Change 37.6% -52.87%
Cash & Equivalents $5.711M $14.97M
Short-Term Investments $11.69M $5.378M
Other Short-Term Assets $1.710M $1.760M
YoY Change 44.89% -12.01%
Inventory $7.602M $6.661M
Prepaid Expenses
Receivables $13.12M $14.79M
Other Receivables $0.00 $0.00
Total Short-Term Assets $39.83M $38.18M
YoY Change 29.07% -24.62%
LONG-TERM ASSETS
Property, Plant & Equipment $4.668M $5.168M
YoY Change 154.87% 44.57%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments $4.689M $7.612M
YoY Change -39.28% 66.94%
Other Assets $124.9K $170.9K
YoY Change -26.57% 0.0%
Total Long-Term Assets $9.482M $12.95M
YoY Change -26.45% 55.93%
TOTAL ASSETS
Total Short-Term Assets $39.83M $38.18M
Total Long-Term Assets $9.482M $12.95M
Total Assets $49.31M $51.13M
YoY Change 12.71% -13.27%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $7.077M $4.937M
YoY Change 30.11% 35.79%
Accrued Expenses $6.216M $8.283M
YoY Change -8.79% 35.49%
Deferred Revenue $916.8K $1.098M
YoY Change -1.47%
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $15.88M $15.12M
YoY Change 9.83% 10.37%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00
YoY Change
Other Long-Term Liabilities $3.925M $4.149M
YoY Change 186.55% 73.96%
Total Long-Term Liabilities $3.925M $4.149M
YoY Change 186.55% 73.96%
TOTAL LIABILITIES
Total Short-Term Liabilities $15.88M $15.12M
Total Long-Term Liabilities $3.925M $4.149M
Total Liabilities $19.80M $19.10M
YoY Change 0.21% 20.04%
SHAREHOLDERS EQUITY
Retained Earnings -$358.2M -$332.2M
YoY Change 5.84%
Common Stock $1.123M $926.3K
YoY Change 20.84%
Preferred Stock
YoY Change
Treasury Stock (at cost) $103.1K
YoY Change 0.0%
Treasury Stock Shares
Shareholders Equity $29.51M $32.03M
YoY Change
Total Liabilities & Shareholders Equity $49.31M $51.13M
YoY Change 12.71% -13.27%

Cashflow Statement

Concept 2023 Q4 2022 Q3
OPERATING ACTIVITIES
Net Income -$6.489M -$4.501M
YoY Change 5.39% 111.41%
Depreciation, Depletion And Amortization $108.2K $130.0K
YoY Change 90.53% -15.64%
Cash From Operating Activities -$3.471M -$4.166M
YoY Change 66.5% 20.62%
INVESTING ACTIVITIES
Capital Expenditures $469.5K -$37.21K
YoY Change 146.37% -80.6%
Acquisitions
YoY Change
Other Investing Activities $52.51K -$480.6K
YoY Change -94.73% 1599.86%
Cash From Investing Activities -$427.0K -$517.7K
YoY Change -152.94% 135.22%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -5.000K 832.2K
YoY Change -95.15% -82.26%
NET CHANGE
Cash From Operating Activities -3.471M -4.166M
Cash From Investing Activities -427.0K -517.7K
Cash From Financing Activities -5.000K 832.2K
Net Change In Cash -3.903M -3.851M
YoY Change 182.58% -478.62%
FREE CASH FLOW
Cash From Operating Activities -$3.471M -$4.166M
Capital Expenditures $469.5K -$37.21K
Free Cash Flow -$3.940M -$4.128M
YoY Change 73.19% 26.57%

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<p id="xdx_804_eus-gaap--BasisOfAccounting_zl9aetjPyD35" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>1. <span id="xdx_820_zi8ZrPRindmd">BASIS OF PRESENTATION</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify; text-indent: -22.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The condensed consolidated financial statements of Kopin Corporation as of September 30, 2023 and for the nine month periods ended September 30, 2023 and September 24, 2022 are unaudited and include all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the periods then ended. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. 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. As used in this report, the terms “we”, “us”, “our”, “Kopin” and the “Company” mean Kopin Corporation and its subsidiaries, unless the context indicates another meaning.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 22.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The condensed consolidated financial statements for the nine months ended September 30, 2023 include the accounts of Kopin Corporation and its wholly owned subsidiaries. The condensed consolidated financial statements for the nine months ended September 24, 2022 include the accounts of Kopin Corporation and its wholly owned subsidiaries. Net loss attributable to noncontrolling interest in the Company’s condensed consolidated statements of operations for the nine months ended September 24, 2022 represents the <span id="xdx_908_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pid_dp_c20220924__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--EMDTMember_zPglYuEz91Ji" title="Equity ownership percentage">20</span>% of the results of operations of a former partially owned subsidiary which is allocated to the shareholders of the equity interests not owned by the Company. All intercompany transactions and balances have been eliminated.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 22.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company’s current strategy is to continue to invest in research and development, even during unprofitable periods, which may result in the Company continuing to incur net losses and negative cash flows from operations. If the Company is unable to achieve and maintain positive cash flows and profitability in the foreseeable future, its financial condition may ultimately be materially adversely affected such that management may be required to reduce operating expenses, including investments in research and development, or raise additional capital. While there can be no assurance the Company will be able to successfully reduce operating expenses or raise additional capital, management believes its historical success in managing cash flows and obtaining capital will continue in the foreseeable future.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On January 27, 2023, the Company sold <span id="xdx_906_eus-gaap--SaleOfStockNumberOfSharesIssuedInTransaction_c20230126__20230127_zhtBjeQ37ihb" title="Number of registered common stock sold">17,000,000</span> shares of common stock and pre-funded warrants to purchase up to <span id="xdx_90A_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iI_pid_c20230127__us-gaap--ClassOfWarrantOrRightAxis__custom--PrefundedWarrantsMember_z1rpBzSmKP35" title="Pre-funded warrants issued to purchase common stock">6,000,000</span> shares of common stock at a public offering price of $<span id="xdx_901_eus-gaap--SharePrice_iI_pid_c20230127__us-gaap--ClassOfWarrantOrRightAxis__custom--PrefundedWarrantsMember_zJPPxGR04mE9" title="Offering price per share">0.99</span> per share for net proceeds of approximately $<span id="xdx_90C_eus-gaap--ProceedsFromIssuanceOfWarrants_pn5n6_c20230126__20230127__us-gaap--ClassOfWarrantOrRightAxis__custom--PrefundedWarrantsMember_z5qprbdBs9Qc" title="Proceeds from issuance of warrants">21.4</span> million. The Company believes that its existing cash and cash equivalents will be adequate to satisfy its current operating plans for at least the next twelve months from the issuance of these financial statements. The Company has in the past sold equity securities through at-the-market equity offerings and in the traditional fashion of significant equity offerings. Nonetheless, management monitors the capital markets on an ongoing basis and may consider raising capital if favorable market conditions develop. If the Company’s actual results are less than projected or the Company needs to raise capital for additional liquidity, the Company may be required to do additional equity financings, reduce expenses, or enter into a strategic transaction. However, management can make no assurance that the Company will be able to raise additional capital, reduce expenses sufficiently, or enter into a strategic transaction on terms acceptable to the Company, or at all.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On January 5, 2023, the Company entered into a Technology License Agreement and an Asset Purchase Agreement (the “LST Agreements”) with Lightning Silicon Technology, Inc. (“LST”). Pursuant to the LST Agreements, the Company issued a license to LST for certain technology associated with our Organic Light Emitting Technology, transferred in-process development contracts with two customers and accounts receivables that the Company had previously determined were not collectible. The technology license agreement provides for Kopin to transfer certain patents to LST if LST achieves certain milestones; however upon transfer, Kopin will receive a license to the technology. To the extent LST makes improvements to the technology licensed from Kopin, Kopin will receive a license for these improvements for certain markets. Kopin is not obligated to provide any additional funding support to LST. As consideration for the transaction, the Company received <span id="xdx_907_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pid_c20230104__20230105__us-gaap--TypeOfArrangementAxis__custom--LSTAgreementMember__dei--LegalEntityAxis__custom--LightningSiliconTechnologyIncMember_zDZJQN99CLk8">18,000,000</span> preferred shares in LST, which the Company determined had no fair value as of the transaction date or as of September 30, 2023. While these shares represent a <span id="xdx_90F_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pid_dp_c20230105__us-gaap--TypeOfArrangementAxis__custom--LSTAgreementMember__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--LightningSiliconTechnologyIncMember_z4EcIA2zFA43">20.0</span>% equity stake in LST, they do not provide the Company with voting rights to elect LST’s Governance Board. The Company will also receive a royalty based on unit sales of products that utilize the technology licensed. Drs. John Fan, the Company’s former President, CEO and Chairman of the Board, Boryeu Tsaur, a former Executive Vice President of the Company and Hong Choi, the Company’s former Chief Technology Officer terminated their employment with the Company and became investors in and members of the management team of LST. Dr. Fan is the Founder of LST. As a result of this transaction, in 2022 the Company wrote off the two operating lease assets associated with facilities used for the development of our organic light emitting diode (OLED) products.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p>
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2059189 usd
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0.66 pure
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us-gaap Financing Receivable Allowance For Credit Losses Recovery
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NetContractAssetsLiabilities
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SaleOfStockNumberOfSharesIssuedInTransaction
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2.22
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1.59
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2.83
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6600000 usd
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P3Y
CY2022Q4 us-gaap Standard Product Warranty Accrual
StandardProductWarrantyAccrual
1966000 usd
us-gaap Standard Product Warranty Accrual Warranties Issued
StandardProductWarrantyAccrualWarrantiesIssued
676000 usd
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481000 usd
CY2023Q3 us-gaap Standard Product Warranty Accrual
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2161000 usd
us-gaap Current Income Tax Expense Benefit
CurrentIncomeTaxExpenseBenefit
100000 usd
us-gaap Current Income Tax Expense Benefit
CurrentIncomeTaxExpenseBenefit
100000 usd
CY2023Q3 us-gaap Operating Loss Carryforwards
OperatingLossCarryforwards
135500000 usd
CY2023Q3 KOPN Operating Loss Carryforwards Unlimited
OperatingLossCarryforwardsUnlimited
92900000 usd
CY2023Q3 us-gaap Contract With Customer Asset Net Current
ContractWithCustomerAssetNetCurrent
5882340 usd
CY2022Q4 us-gaap Contract With Customer Asset Net Current
ContractWithCustomerAssetNetCurrent
4068364 usd
us-gaap Contract With Customer Asset Cumulative Catch Up Adjustment To Revenue Modification Of Contract
ContractWithCustomerAssetCumulativeCatchUpAdjustmentToRevenueModificationOfContract
1813976 usd
CY2023Q3 KOPN Percentage Of Change In Contract Assets Current
PercentageOfChangeInContractAssetsCurrent
0.45 pure
CY2023Q3 us-gaap Contract With Customer Liability Current
ContractWithCustomerLiabilityCurrent
668046 usd
CY2022Q4 us-gaap Contract With Customer Liability Current
ContractWithCustomerLiabilityCurrent
930500 usd
us-gaap Contract With Customer Liability Revenue Recognized
ContractWithCustomerLiabilityRevenueRecognized
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ContractWithCustomerLiabilityRevenueRecognized
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us-gaap Contract With Customer Liability Revenue Recognized
ContractWithCustomerLiabilityRevenueRecognized
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CY2023Q3 us-gaap Revenue Remaining Performance Obligation
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CY2023Q3 us-gaap Operating Lease Cost
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CY2022Q3 us-gaap Operating Lease Cost
OperatingLeaseCost
242833 usd
us-gaap Operating Lease Cost
OperatingLeaseCost
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us-gaap Operating Lease Cost
OperatingLeaseCost
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CY2023Q3 us-gaap Lessee Operating Lease Liability Payments Remainder Of Fiscal Year
LesseeOperatingLeaseLiabilityPaymentsRemainderOfFiscalYear
234233 usd
CY2023Q3 us-gaap Lessee Operating Lease Liability Payments Due Next Twelve Months
LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths
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637893 usd
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CY2023Q3 us-gaap Lessee Operating Lease Liability Payments Due Year Five
LesseeOperatingLeaseLiabilityPaymentsDueYearFive
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CY2023Q3 us-gaap Lessee Operating Lease Liability Payments Due
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CY2023Q3 us-gaap Lessee Operating Lease Liability Undiscounted Excess Amount
LesseeOperatingLeaseLiabilityUndiscountedExcessAmount
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OperatingLeaseLiability
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CY2023Q3 us-gaap Operating Lease Liability
OperatingLeaseLiability
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us-gaap Operating Lease Payments
OperatingLeasePayments
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CY2023Q3 us-gaap Operating Lease Weighted Average Discount Rate Percent
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CY2023Q3 us-gaap Operating Lease Weighted Average Remaining Lease Term1
OperatingLeaseWeightedAverageRemainingLeaseTerm1
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CY2023Q3 us-gaap Noncurrent Assets
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RevenueFromContractWithCustomerExcludingAssessedTax
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RevenueFromContractWithCustomerExcludingAssessedTax
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us-gaap Revenue From Contract With Customer Excluding Assessed Tax
RevenueFromContractWithCustomerExcludingAssessedTax
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KOPN Percentage Of Total Revenue
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us-gaap Revenue From Contract With Customer Excluding Assessed Tax
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CY2023Q3 us-gaap Revenue From Contract With Customer Excluding Assessed Tax
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CY2023Q3 us-gaap Revenues
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CY2022Q3 us-gaap Revenues
Revenues
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us-gaap Revenues
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AccountsPayableCurrentAndNoncurrent
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AccountsReceivableNet
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