KOPIN CORP, 10-K filed on 3/4/2016
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 26, 2015
Feb. 26, 2016
Jun. 27, 2015
Document Documentand Entity Information [Abstract]
 
 
 
Document Type
10-K 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Dec. 26, 2015 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Trading Symbol
KOPN 
 
 
Entity Registrant Name
KOPIN CORP 
 
 
Entity Central Index Key
0000771266 
 
 
Current Fiscal Year End Date
--12-26 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
66,673,905 
 
Entity Public Float
 
 
$ 239,599,673 
CONSOLIDATED BALANCE SHEETS (USD $)
Dec. 26, 2015
Dec. 27, 2014
Current assets:
 
 
Cash and equivalents
$ 19,767,889 
$ 14,635,801 
Marketable debt securities, at fair value
60,942,891 
76,223,135 
Accounts receivable, net of allowance of $153,000 and $266,000 in 2015 and 2014, respectively
1,487,633 
3,758,832 
Unbilled receivables
87,340 
43,492 
Inventory
2,512,473 
4,081,886 
Prepaid taxes
437,586 
378,637 
Prepaid expenses and other current assets
920,410 
802,837 
Notes Receivable, Fair Value Disclosure
15,000,000 
Total current assets
101,156,222 
99,924,620 
Property, plant and equipment, net
2,677,103 
4,589,421 
Goodwill
946,082 
976,451 
Intangible assets, net
616,759 
Other assets
461,416 
1,900,828 
Accounts and Notes Receivable, Net
14,933,335 
Real Estate Held-for-sale
819,263 
Total assets
106,060,086 
122,941,414 
Current liabilities:
 
 
Accounts payable
3,959,704 
5,503,734 
Accrued payroll and expenses
1,631,292 
1,985,691 
Accrued warranty
518,000 
716,000 
Billings in excess of revenue earned
1,407,566 
586,471 
Other accrued liabilities
2,553,282 
3,169,028 
Deferred tax liabilities
1,207,000 
1,282,000 
Total current liabilities
11,276,844 
13,242,924 
Asset retirement obligations
298,463 
311,187 
Commitments and contingencies
   
   
Stockholders’ equity:
 
 
Preferred stock, par value $.01 per share: authorized, 3,000 shares; none issued
Common stock, par value $.01 per share: authorized, 120,000,000 shares; issued 78,271,659 shares in 2015 and 77,731,604 shares in 2014; outstanding 63,977,385 in 2015 and 63,077,715 in 2014, respectively
760,796 
751,832 
Additional paid-in capital
326,558,527 
324,625,694 
Treasury stock (12,102,258 shares in 2015 and 2014, respectively, at cost)
(42,741,551)
(42,741,551)
Accumulated other comprehensive income
771,774 
3,126,239 
Accumulated deficit
(190,608,671)
(175,915,255)
Total Kopin Corporation stockholders’ equity
94,740,875 
109,846,959 
Noncontrolling interest
(256,096)
(459,656)
Total stockholders’ equity
94,484,779 
109,387,303 
Total liabilities and stockholders’ equity
$ 106,060,086 
$ 122,941,414 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Dec. 26, 2015
Dec. 27, 2014
Accounts receivable, allowance
$ 153,000 
$ 266,000 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, authorized
3,000 
3,000 
Preferred stock, issued
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, authorized
120,000,000 
120,000,000 
Common stock, issued
78,271,659 
77,731,604 
Common stock, outstanding
63,977,385 
63,077,715 
Treasury stock, shares
12,102,258 
12,102,258 
CONSOLIDATED STATEMENT OF OPERATIONS (USD $)
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Revenues:
 
 
 
Net component revenues
$ 28,163,118 
$ 26,956,741 
$ 20,574,812 
Research and development revenues
3,891,301 
4,850,724 
2,322,897 
Total revenues
32,054,000 
31,807,465 
22,897,709 
Expenses:
 
 
 
Cost of component revenues
21,609,826 
19,638,149 
20,655,216 
Research and development-funded programs
3,006,352 
5,236,791 
1,550,873 
Research and development-internal
14,625,061 
15,499,230 
15,983,147 
Selling, general and administrative
18,134,580 
19,908,020 
19,124,750 
Goodwill and Intangible Asset Impairment
1,511,414 
Total expenses
57,375,819 
60,282,190 
58,825,400 
Loss from operations
(25,321,400)
(28,474,725)
(35,927,691)
Other income and expense:
 
 
 
Interest income
758,153 
966,403 
1,118,617 
Other income, net
127,512 
271,537 
235,917 
Foreign Currency Transaction Gain (Loss), Unrealized
408,192 
91,725 
(387,351)
Gain on sales of investments
9,206,919 
1,899,291 
Impairment of equity and cost investments
(1,319,287)
(5,000,442)
Total other income and expense
10,500,776 
10,378 
(2,133,968)
Loss from continuing operations before benefit for income taxes, and equity losses in unconsolidated affiliates and net loss of noncontrolling interest
(14,820,624)
(28,464,347)
(38,061,659)
Equity losses in unconsolidated affiliates
(47,443)
(386,442)
(625,098)
Loss from continuing operations
(14,843,067)
(28,670,789)
(25,753,548)
Income from discontinued operations, net of tax
20,147,532 
Net loss
(14,843,067)
(28,670,789)
(5,606,016)
Net loss attributable to the noncontrolling interest
149,651 
458,745 
896,400 
Net loss attributable to the controlling interest
(14,693,416)
(28,212,044)
(4,709,616)
Basic:
 
 
 
Continuing operations (in dollars per share)
$ (0.23)
$ (0.45)
$ (0.40)
Discontinued operations (in dollars per share)
$ 0.00 
$ 0.00 
$ 0.32 
Net (loss) income per share (in dollars per share)
$ (0.23)
$ (0.45)
$ (0.08)
Diluted:
 
 
 
Continuing operations (in dollars per share)
$ (0.23)
$ (0.45)
$ (0.40)
Discontinued operations (in dollars per share)
$ 0.00 
$ 0.00 
$ 0.32 
Net (loss) income per share (in dollars per share)
$ (0.23)
$ (0.45)
$ (0.08)
Weighted average number of common shares outstanding:
 
 
 
Basic (in shares)
63,465,797 
62,638,675 
62,347,852 
Diluted (in shares)
63,465,797 
62,638,675 
62,347,852 
Foreign currency translation adjustments
(1,060,186)
(1,102,859)
231,321 
Unrealized holding gain (loss) on marketable securities
104,362 
681,346 
(116,134)
Reclassifications of gains in net loss
(1,490,776)
(6,477)
(1,936,121)
Other comprehensive loss
(2,446,600)
(427,990)
(1,820,934)
Comprehensive loss
(17,289,667)
(29,098,779)
(7,426,950)
Comprehensive (loss) gain attributable to the noncontrolling interest
(91,200)
570,977 
871,867 
Comprehensive loss attributable to the controlling interest
(17,380,867)
(28,527,802)
(6,555,083)
Current Income Tax Expense (Benefit)
25,000 
180,000 
12,933,209 
Income Before Minority Interest Earnings And Equity Investments
$ (14,795,624)
$ (28,284,347)
$ (25,128,450)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)
Total
Common Stock
Additional Paid-in Capital
Treasury Stock
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Total Kopin Corporation Stockholders' Equity
Noncontrolling Interest
Stockholders' Equity, Total [Member]
Beginning Balance at Dec. 29, 2012
$ 155,085,910 
$ 736,966 
$ 318,928,495 
$ (34,450,978)
$ 6,512,792 
$ (142,993,596)
$ 148,733,679 
$ 6,352,230 
 
Beginning Balance (in shares) at Dec. 29, 2012
 
73,696,644 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Vesting of restricted stock (in shares)
 
1,216,900 
 
 
 
 
 
 
 
Vesting of restricted stock
 
12,169 
(12,169)
 
 
 
 
 
 
Stock-based compensation expense
3,804,408 
 
3,804,408 
 
 
 
3,804,408 
 
 
Other comprehensive loss
(1,820,934)
 
 
 
(1,845,466)
 
(1,845,466)
24,532 
 
Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustments Before Tax
(4,253,680)
 
 
 
(1,580,629)
 
 
(2,673,051)
 
Income Before Minority Interest Earnings And Equity Investments
200,198 
 
 
 
 
 
 
200,198 
 
Stockholders' Equity Attributable to Noncontrolling Interest
 
 
(1,020,130)
 
355,300 
 
(664,830)
(2,997,570)
(3,662,400)
Restricted stock for tax withholding obligations (in shares)
 
(320,061)
 
 
 
 
 
 
 
Restricted stock for tax withholding obligations
(1,192,346)
(3,200)
(1,189,146)
 
 
 
(1,192,346)
 
 
Treasury stock purchase
(7,991,954)
 
 
(7,991,954)
 
 
(7,991,954)
 
 
Net income (loss)
(5,606,016)
 
 
 
 
(4,709,616)
(4,709,616)
(896,400)
 
Ending Balance at Dec. 28, 2013
134,563,186 
745,935 
320,511,458 
(42,442,932)
3,441,997 
(147,703,212)
134,553,246 
9,939 
 
Ending Balance (in shares) at Dec. 28, 2013
 
74,593,483 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Exercise of stock options (in shares)
 
36,750 
 
 
 
 
 
 
 
Exercise of stock options
137,812 
368 
137,445 
 
 
 
137,812 
 
 
Vesting of restricted stock (in shares)
 
843,116 
 
 
 
 
 
 
 
Vesting of restricted stock
 
8,431 
(8,431)
 
 
 
 
 
 
Stock-based compensation expense
5,059,572 
 
5,059,572 
 
 
 
5,059,572 
 
 
Other comprehensive loss
(427,990)
 
 
 
(315,758)
 
(315,758)
(112,232)
 
Income Before Minority Interest Earnings And Equity Investments
 
 
(101,382)
 
 
 
 
101,382 
(101,382)
Stockholders' Equity Attributable to Noncontrolling Interest
(459,656)
 
 
 
 
 
 
 
 
Restricted stock for tax withholding obligations (in shares)
 
(290,142)
 
 
 
 
 
 
 
Restricted stock for tax withholding obligations
(975,869)
(2,901)
(972,968)
 
 
 
(975,869)
 
 
Treasury stock purchase
(298,619)
 
 
(298,619)
 
 
(298,619)
 
 
Net income (loss)
(28,670,789)
 
 
 
 
(28,212,044)
(28,212,044)
(458,745)
 
Ending Balance at Dec. 27, 2014
109,387,303 
751,833 
324,625,694 
(42,741,551)
3,126,239 
(175,915,255)
109,846,959 
(459,656)
 
Ending Balance (in shares) at Dec. 27, 2014
 
75,183,207 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Exercise of stock options (in shares)
(5,142)
39,798 
 
 
 
 
 
 
 
Exercise of stock options
86,047 
398 
85,649 
 
 
 
86,047 
 
 
Vesting of restricted stock (in shares)
 
1,226,992 
 
 
 
 
 
 
 
Vesting of restricted stock
 
12,270 
(12,270)
 
 
 
 
 
 
Stock-based compensation expense
3,373,479 
 
3,373,479 
 
 
 
3,373,479 
 
 
Other comprehensive loss
(2,446,600)
 
 
 
(2,388,148)
 
 
(58,452)
 
Income Before Minority Interest Earnings And Equity Investments
 
(445,344)
 
33,683 
 
 
411,663 
(411,661)
Stockholders' Equity Attributable to Noncontrolling Interest
(256,096)
 
 
 
 
 
 
 
 
Restricted stock for tax withholding obligations (in shares)
 
(370,354)
 
 
 
 
 
 
 
Restricted stock for tax withholding obligations
(1,072,385)
(3,704)
(1,068,681)
 
 
 
(1,072,385)
 
 
Net income (loss)
(14,843,067)
 
 
 
 
(14,693,416)
(14,693,416)
(149,651)
 
Ending Balance at Dec. 26, 2015
$ 94,484,779 
$ 760,797 
$ 326,558,527 
$ (42,741,551)
$ 771,774 
$ (190,608,671)
$ 94,740,875 
$ (256,096)
 
Ending Balance (in shares) at Dec. 26, 2015
 
76,079,643 
 
 
 
 
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Dec. 31, 2011
Cash flows from operating activities:
 
 
 
 
Net loss
$ (14,843,067)
$ (28,670,789)
$ (5,606,016)
 
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
Depreciation and amortization
2,138,982 
3,002,014 
3,646,725 
 
Accretion of premium or discount on marketable debt securities
168,217 
53,437 
360,403 
 
Stock-based compensation
3,145,479 
4,827,772 
4,203,408 
 
Net gain on investment transactions
(9,206,919)
(1,899,291)
 
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property
180,715 
 
Losses in unconsolidated affiliates
102,305 
625,098 
 
Goodwill and Intangible Asset Impairment
1,511,414 
 
Gain (Loss) on Sale of Business
(33,452,176)
 
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property
283,333 
 
Deferred income taxes
(75,000)
(230,725)
252,687 
 
Foreign Currency Transaction Gain (Loss), before Tax
(455,614)
(96,819)
341,590 
 
Asset Impairment Charges
1,319,287 
5,000,442 
 
Change in allowance for bad debt
(112,500)
63,340 
(107,694)
 
Change in warranty reserves
1,560,259 
489,332 
733,428 
 
Extended Product Warranty Accrual, Preexisting Increase (Decrease)
(200,000)
 
Changes in assets and liabilities:
 
 
 
 
Accounts receivable
2,850,942 
(1,286,407)
4,853,073 
 
Inventory
(8,484)
(1,520,824)
2,262,547 
 
Prepaid expenses and other current assets
(207,421)
191,367 
(179,858)
 
Accounts payable and accrued expenses
(2,632,385)
1,829,591 
(773,471)
 
Billings in excess of revenue earned
777,247 
38,790 
(672,714)
 
Net cash used in operating activities
(16,919,549)
(19,604,996)
(18,900,405)
 
Cash flows from investing activities:
 
 
 
 
Proceeds from sale of marketable debt securities
38,055,759 
39,801,276 
17,130,488 
 
Purchase of marketable debt securities
(22,835,740)
(19,867,896)
(49,329,891)
 
Proceeds from sale of investments
9,206,919 
2,597,289 
 
Proceeds from Sale of Machinery and Equipment
250,000 
 
Proceeds from Divestiture of Businesses, Net of Cash Divested
55,188,020 
 
Payments to Acquire Business Three, Net of Cash Acquired
211,484 
 
Purchases of cost based investment
(3,583,611)
 
Other assets
(1,772)
(38,134)
(10,552)
 
Capital expenditures
(1,122,808)
(1,489,986)
(741,543)
 
Net cash provided by investing activities
23,302,358 
18,655,260 
21,461,684 
 
Cash flows from financing activities:
 
 
 
 
Treasury stock purchases
(298,619)
(7,991,954)
 
Purchase of noncontrolling interest in Kowon
(3,662,400)
 
Proceeds from exercise of stock options and warrants
86,047 
137,813 
 
Settlements of restricted stock for tax withholding obligations
(1,072,385)
(975,869)
(1,192,346)
 
Net cash used in financing activities
(986,338)
(1,136,675)
(12,846,700)
 
Effect of exchange rate changes on cash
(264,383)
(34,454)
(93,300)
 
Net decrease in cash and equivalents
5,132,088 
(2,120,865)
(10,378,721)
 
Cash and equivalents:
 
 
 
 
Beginning of year
14,635,801 
 
16,756,666 
 
End of year
19,767,889 
14,635,801 
 
27,135,387 
Supplemental schedule of noncash investing activities:
 
 
 
 
Income Taxes Paid, Net
50,000 
(18,000)
95,000 
 
Construction in progress included in accrued expenses
373,000 
105,000 
 
Significant Acquisitions and Disposals, Acquisition Costs or Sale Proceeds
$ 0 
$ 0 
 
 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
 Summary of Significant Accounting Policies
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fiscal Year
The Company’s fiscal year ends on the last Saturday in December. The fiscal years ended December 26, 2015, December 27, 2014 and December 28, 2013 include 52 weeks, and are referred to as fiscal years 2015, 2014 and 2013, respectively, herein.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, a majority owned 93% subsidiary, Kowon Technology Co., Ltd. (Kowon), located in Korea, and a majority owned 80% subsidiary, eMDT America Inc (eMDT), located in California (collectively the Company). In the fourth quarter of 2015, the Company increased its investment in Kopin Software Ltd. (KSL) (formerly Intoware Ltd.) from 58% to 100%. Net loss attributable to noncontrolling interest in the Company's consolidated statement of operations represents the portion of the results of operations of Kowon and eMDT for the twelve month period ended December 26, 2015 and for the period of time during 2015 when the Company owned 58% of KSL, which is allocated to the shareholders of the equity interests not owned by the Company. All intercompany transactions and balances have been eliminated. Investments in business entities in which the Company does not have control but has the ability to exercise significant influence over operating and financial policies are accounted for by the equity method.
The Company ceased its production activities at its Kowon facility in 2013 and commenced offering the facility for sale. The Company believes the facility will be sold within the next 12 months and has classified the facility as non-current assets held for sale.
Revenue Recognition
The Company recognizes revenue if four basic criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred and services rendered; (3) the price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. The Company does not recognize revenue for products prior to customer acceptance unless it believes the product meets all customer specifications and the Company has a history of consistently achieving customer acceptance of the product. Provisions for product returns and allowances are recorded in the same period as the related revenues. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of product when evaluating the adequacy of sales returns and other allowances. Certain product sales are made to distributors under agreements allowing for a limited right of return on unsold products. Sales to distributors are primarily made for sales to the distributors' customers and not for their stocking of inventory. The Company delays revenue recognition for its estimate of distributor claims of right of return on unsold products based upon its historical experience with the Company’s products and specific analysis of amounts subject to return based upon discussions with the Company’s distributors or their customers.
The Company recognizes revenues from long-term research and development contracts on the percentage-of-completion method of accounting as work is performed, based upon the ratio of costs or hours already incurred to the estimated total cost of completion or hours of work to be performed. Revenue recognized at any point in time is limited to the amount funded by the U.S. government or contracting entity. The Company accounts for product development and research contracts that have established prices for distinct phases as if each phase were a separate contract. In some instances, the Company is contracted to create a deliverable which is anticipated to be qualified and go into full rate production stages. In those cases, the revenue recognition methodology will change from the percentage of completion method to the units-of-delivery method as new contracts are received after formal qualification has been completed. Under certain of its research and development contracts, the Company recognizes revenue on a milestone methodology.  This revenue is recognized when the Company achieves specified milestones based on its past performance.
 
The Company classifies amounts earned on contracts in progress that are in excess of amounts billed as unbilled receivables and classifies amounts received in excess of amounts earned as billings in excess of revenues earned. The Company invoices based on dates specified in the related agreement or in periodic installments based upon its invoicing cycle. The Company recognizes the entire amount of an estimated ultimate loss in its financial statements at the time the loss on a contract becomes known.
Research and Development Costs
Research and development expenses are incurred in support of internal display product development programs or programs funded by agencies or prime contractors of the U.S. government and commercial partners. Research and development costs include staffing, purchases of materials and laboratory supplies, circuit design costs, fabrication and packaging of experimental display products, and overhead, and are expensed immediately.
Cash and equivalents and Marketable securities
The Company considers all highly liquid, short-term debt instruments with original maturities of three months or less to be cash equivalents.
Marketable debt securities consist primarily of commercial paper, medium-term corporate notes, and United States government and agency backed securities. The Company classifies these marketable debt securities as available-for-sale at fair value in “Marketable debt securities, at fair value.” The investments in Vuzix Corporation (Vuzix) and GCS Holdings are included in "Other Assets" as available-for-sale and at fair value. The Company records the amortization of premium and accretion of discounts on marketable debt securities in the results of operations.
The Company uses the specific identification method as a basis for determining cost and calculating realized gains and losses with respect to marketable debt securities. The gross gains and losses realized related to sales of marketable debt securities were not material during fiscal years 2015, 2014 and 2013.
Inventory
Inventory is stated at the lower of cost (determined on the first-in, first-out method) or market and consists of the following at December 26, 2015 and December 27, 2014:
 
2015
 
2014
Raw materials
$
844,475

 
$
2,057,202

Work-in-process
1,281,891

 
1,551,799

Finished goods
386,107

 
472,885

 
$
2,512,473

 
$
4,081,886


Property, plant and equipment
Property, plant and equipment are recorded at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets, generally 3 to 10 years. Leasehold improvements and leased equipment are amortized over the shorter of the term of the lease or the useful life of the improvement or equipment. As discussed below, obligations for asset retirement are accrued at the time property, plant and equipment is initially purchased or as such obligations are generated from use.
Intangible assets

At December 26, 2015 and December 27, 2014, intangible assets consisted of patents. Identifiable intangible assets are amortized using the straight-line method over the estimated useful lives of the assets, generally three to seven years.

Assets held for sale
Assets held for sale as of December 26, 2015 consist of land with a cost of $0.8 million and buildings with a cost and net book value of $2.1 million and $0.0 million, respectively, located at the Company’s subsidiary Kowon. Kowon is included in the Kopin segment. The Company did not reclassify its presentation for the December 27, 2014 balance sheet.

Product Warranty
The Company generally sells products with a limited warranty of product quality and a limited indemnification of customers against intellectual property infringement claims related to the Company’s products. The Company accrues for known warranty and indemnification issues if a loss is probable and can be reasonably estimated, and accrues for estimated incurred but unidentified issues based on historical activity. As of December 26, 2015 and December 27, 2014, the Company had warranty reserves of $0.5 million and $0.7 million respectively. For the fiscal years 2015, 2014 and 2013 warranty claims and reversals were approximately $0.8 million, $0.4 million and $0.8 million, respectively.
Asset Retirement Obligations
The Company recorded asset retirement obligations (ARO) liabilities of $0.3 million at December 26, 2015 and December 27, 2014, respectively. This represents the legal obligations associated with retirement of the Company’s assets when the timing and/or method of settling the obligation are conditional on a future event that may or may not be within the control of the Company.
 
2015
 
2014
Beginning balance
$
311,187

 
$
329,435

Additions

 

Charges

 

Exchange rate change
(12,724
)
 
(18,248
)
Ending balance
$
298,463

 
$
311,187


Income Taxes
The consolidated financial statements reflect provisions for federal, state, local and foreign income taxes. The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as operating loss and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company provides valuation allowances if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Foreign Currency
Assets and liabilities of non-U.S. operations where the functional currency is other than the U.S. dollar are translated from the functional currency into U.S. dollars at year end exchange rates, and revenues and expenses at average rates prevailing during the year. Resulting translation adjustments are accumulated as part of accumulated other comprehensive income. Transaction gains or losses are recognized in income or loss in the period in which they occur.
Net (Loss) Income Per Share
Basic net (loss) income per share is computed using the weighted-average number of shares of common stock outstanding during the period less any unvested restricted shares. Diluted earnings per common share is calculated using weighted-average shares outstanding and contingently issuable shares, less weighted-average shares reacquired during the period. The net outstanding shares are adjusted for the dilutive effect of shares issuable upon the assumed conversion of the Company’s common stock equivalents, which consist of outstanding stock options and unvested restricted stock.
Weighted-average common shares outstanding used to calculate earnings per share, is as follows:
 
 
2015
 
2014
 
2013
Weighted-average common shares outstanding—basic
63,465,797

 
62,638,675

 
62,347,852

Stock options and nonvested restricted common stock

 

 

Weighted-average common shares outstanding—diluted
63,465,797

 
62,638,675

 
62,347,852


The following were not included in weighted-average common shares outstanding-diluted because they are anti-dilutive or performance conditions have not been met at the end of the period.
 
 
2015
 
2014
 
2013
Nonvested restricted common stock
2,192,016

 
2,551,631

 
3,024,148

Stock options

 
130,500

 
558,850

Total
2,192,016

 
2,682,131

 
3,582,998


    
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk other than marketable securities consist principally of trade accounts receivable. Trade receivables are primarily derived from sales to manufacturers of consumer electronic devices and wireless components or military applications.
The Company primarily invests its excess cash in government backed and corporate financial instruments that management believes to be of high credit worthiness, which bear lower levels of relative credit risk. The Company relies on rating agencies to ascertain the credit worthiness of its marketable securities and, where applicable, guarantees by the Federal Deposit Insurance Company. The Company sells its products to customers worldwide and generally does not require collateral. The Company maintains a reserve for potential credit losses.
Fair Value of Financial Instruments
Financial instruments consist of current assets (except inventories, income tax receivables and prepaid assets) and certain current liabilities. Current assets (excluding marketable securities which are recorded at fair value) and current liabilities are carried at cost, which approximates fair value.
Stock-Based Compensation
The fair value of stock option awards is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. There were no stock options granted in fiscal years 2015, 2014 or 2013.
 
The fair value of nonvested restricted common stock awards is generally the market value of the Company’s equity shares on the date of grant. The nonvested restricted common stock awards require the employee to fulfill certain obligations, including remaining employed by the Company for one, two or four years (the vesting period) and in certain cases also require meeting either performance criteria or the Company’s stock achieving a certain price. The performance criteria primarily consist of the achievement of established milestones. For nonvested restricted common stock awards which solely require the recipient to remain employed with the Company, the stock compensation expense is amortized over the anticipated service period. For nonvested restricted common stock awards which require the achievement of performance criteria, the Company reviews the probability of achieving the performance goals on a periodic basis. If the Company determines that it is probable that the performance criteria will be achieved, the amount of compensation cost derived for the performance goal is amortized over the service period. If the performance criteria are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. The Company recognizes compensation costs on a straight-line basis over the requisite service period for time vested awards.

On February 13, 2015, the Company modified the termination date of certain restricted stock grants previously made to Dr. Fan, the Company’s President and Chief Executive Officer. In 2011, the Company granted Dr. Fan 260,000 shares of restricted stock which will vest upon the first 10 consecutive trading day period following the grant date during which the Company's common stock trades at a price equal to or greater than $5.25 subject to acceleration upon the occurrence of an acceleration event. This grant was originally set to terminate on September 12, 2016. In 2013, the Company granted compensation awards to Dr. Fan that consisted of two grants of 150,000 shares of restricted stock each. One of the grants will vest at the end of the first 10 consecutive trading day period following the grant date during which the Company’s common stock trades at a price per share equal to or greater than $6.00. The other award will vest at the end of the first 10 consecutive trading day period following the grant date during which the Company’s common stock trades at a price per share equal to or greater than $7.00. Both were due to expire in 2023. On December 31, 2014, Dr. Fan entered into a 3-year employment agreement with the Company which expires on December 31, 2017. The Company has amended the three grants to now terminate on December 31, 2017, to be consistent with Dr. Fan's employment agreement.
 
In 2013, the Company granted a compensation award to its Chief Executive Officer that consisted of a grant of 300,000 shares of restricted stock that would vest upon the Company shipping 25,000 units of a new display. The Company shipped the displays in 2015 and the award vested.
Comprehensive Loss
Comprehensive loss is the total of net (loss) income and all other non-owner changes in equity including such items as unrealized holding (losses) gains on marketable equity and debt securities classified as available-for-sale and foreign currency translation adjustments.

The components of accumulated other comprehensive income are as follows:
 
Cumulative
Translation
Adjustment
 
Unrealized Holding
 Gain (Loss) on
Marketable
Securities
 
Acquisition of Minority Interest in KSL
 
Accumulated Other
Comprehensive
Income
Balance as of December 29, 2012
$
3,542,104

 
$
2,970,688

 
$

 
$
6,512,792

Changes during year
(1,017,403
)
 
(2,053,392
)
 

 
(3,070,795
)
Balance as of December 28, 2013
2,524,701

 
917,296

 

 
3,441,997

Changes during year
(990,626
)
 
674,868

 

 
(315,758
)
Balance as of December 27, 2014
1,534,075

 
1,592,164

 

 
3,126,239

Changes during year
(1,001,733
)
 
(1,386,415
)
 
33,683

 
(2,354,465
)
Balance as of December 26, 2015
$
532,342

 
$
205,749

 
$
33,683

 
$
771,774



Impairment of Long-Lived Assets
The Company periodically reviews the carrying value of its long-lived assets to determine if facts and circumstances suggest that they may be impaired or that the amortization or depreciation period may need to be changed. The carrying value of a long-lived asset is considered impaired when the anticipated identifiable undiscounted cash flows from such asset are less than its carrying value. For assets that are to be held and used, impairment is measured based upon the amount by which the carrying amount of the asset exceeds its fair value. The carrying value of the Company’s long-lived assets was $2.7 million at December 26, 2015.
Recently Issued Accounting Pronouncements
Revenue from Contracts with Customers
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This new standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In addition, ASU 2014-09 provides guidance on accounting for certain revenue-related costs including, but not limited to, when to capitalize costs associated with obtaining and fulfilling a contract. The standard also requires certain new disclosures. The standard was effective for annual and interim reporting periods beginning after December 15, 2016.
In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers. The amendments in this ASU defer the effective date of ASU 2014-09. Public companies should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the expected impact of this new guidance on its consolidated financial statements and available adoption methods.
Balance Sheet Reclassification of Deferred Taxes
In November 2015, the FASB issued ASU 2015-17,  Balance Sheet Classification of Deferred Taxes, which will require entities to present all deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) as non-current on the balance sheet. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted, and entities may choose whether to adopt this update prospectively or retrospectively. The Company has evaluated ASU 2015-17 and determined that its adoption will not have a material effect on its financial position or earnings.
On December 26, 2015, the Company elected to adopt ASU 2015-17 and change its method of classifying DTAs and DTLs as either current or non-current to classifying all DTAs and DTLs as non-current, and has chosen to apply a prospective method. The prior balance sheet as of December 27, 2014 was not retrospectively adjusted as there was no impact to its historical presentation.

Statement of Comprehensive Income

During the twelve months ended December 26, 2015, the change in the Company's accumulated other comprehensive income was the net of $(1.0) million cumulative translation adjustment, $0.1 million unrealized holding gains on marketable securities and $(1.5) million of reclassified holding gains.
Discontinued Operations
Discontinued Operations
Discontinued Operations
On January 16, 2013, (the Closing Date), the Company sold its III-V product line, including all of the outstanding equity interest in KTC Wireless, LLC (KTC), a wholly owned subsidiary of the Company, to IQE KC, LLC (IQE) and IQE plc (Parent, and collectively with IQE, the Buyer) pursuant to a Purchase Agreement (the Purchase Agreement) entered into on January 10, 2013 for an aggregate purchase price price, after adjustments for working capital items of $70.2 million of which $55.2 million was paid to the Company in 2013 and the remaining $15 million was paid on January 15, 2016.
The operating results of the III-V product line prior to the Sale are reported within Income from discontinued operations, net of tax, in the consolidated statement of operations and have been excluded from segment results.
The following table summarizes the results from discontinued operations:
 
 
 
December 28, 2013
Net product and research and development revenues
$
2.3

(Loss) gain from discontinued operations before income taxes
(0.2
)
(Provision) benefit for income taxes on discontinued operations

Discontinued operations, net of tax
(0.2
)
Gain on sale, net of $13.1 million of tax
20.4

Income from discontinued operations, net of tax
$
20.2

Property, Plant and Equipment
Property, Plant and Equipment
Property, Plant and Equipment
Property, plant and equipment consisted of the following at December 26, 2015 and December 27, 2014:
 
 
Useful Life
 
2015
 
2014
Land
 
 
$

 
$
877,485

Buildings
10 years
 

 
2,298,367

Equipment
3-5 years
 
18,765,548

 
19,696,919

Leasehold improvements
Life of the lease
 
3,659,559

 
3,652,395

Furniture and fixtures
3 years
 
789,067

 
886,985

Equipment under construction
 
 
312,916

 
657,142

 
 
 
23,527,090

 
28,069,293

Accumulated depreciation and amortization
 
 
(20,849,987
)
 
(23,479,872
)
Net property, plant and equipment
 
 
$
2,677,103

 
$
4,589,421


There were no material gains or losses on disposals of long-lived assets in fiscal years 2015, 2014 and 2013. Depreciation expense for the fiscal years 2015, 2014 and 2013 was approximately $1.5 million, $2.6 million and $2.4 million, respectively.
In February 2016, the Company entered into an agreement to sell land and its Korean facility for an estimated $7.6 million based on the exchange rate on the date of the agreement. The closure of the transaction is based on completion of environment testing and other factors, all of which are expected to be completed by June 2016.
Other Assets and Amounts Due to / Due From Affiliates
Other Assets and Amounts Due To / Due From Affiliates
Other Assets and Note Receivable
Marketable Equity Securities
As of December 26, 2015 and December 27, 2014, the Company had an investment in GCS Holdings which had a fair market value of $0.2 million and an adjusted cost basis of $0.0 million.
On February 25, 2015, the Company acquired approximately 251,000 shares of Vuzix common stock through a cashless exercise of warrants. The Company received the warrants in August 2013 as part of a restructuring of debt owed by Vuzix to the Company. Upon receipt of the warrants, the Company should have recorded the value of the warrant of approximately $352,000 in its consolidated financial statements. Subsequently, the Company should have marked to market the warrants at the end of each reporting period. Had the Company recorded the warrants in its consolidated financial statements and marked to market the warrants as of December 28, 2013 and December 27, 2014, the Company would have recorded gains in its statement of operations of approximately $646,000 and $171,000, respectively. In the first quarter of 2015, the Company recorded the warrants in its consolidated financial statements and as a result recorded a gain of approximately $1.3 million with $817,000 attributed to prior periods. The value of the warrants as of August 2013, December 28, 2013 and December 27, 2014 was determined using the Black-Scholes pricing model. The Company does not believe the unrecorded gains were material to the consolidated financial statements as the loss from operations for the fiscal years ended December 28, 2013 and December 27, 2014 were $35.9 million and $28.5 million, respectively.
Non-Marketable Securities—Equity Method Investments
Equity losses in unconsolidated affiliates recorded in the consolidated statement of operations are as follows:
 
 
2015
 
2014
 
2013
KoBrite
$

 
$
(102,305
)
 
$
(406,811
)
Ask Ziggy
$
(47,443
)
 
$
(284,137
)
 
$
(218,287
)
Total
$
(47,443
)
 
$
(386,442
)
 
$
(625,098
)

In the second quarter of 2014 the Company wrote-off its $1.3 million investment in KoBrite. Prior to the write-off, the Company accounted for its 12% ownership interest in Kobrite using the equity method. One of the Company’s directors is a member of the Board of Directors of Bright LED, principal investor of KoBrite.
In December 2013, the Company wrote down its investment of $2.5 million in Ask Ziggy. The Company continued to fund Ask Ziggy during the first quarter of year ending December 26, 2015. During the twelve months ended December 28, 2013, the Company recorded impairment charges of $2.5 million related to the write-off of a cost based investment.
Summarized financial information for 2013 includes Kobrite for the year ended September 30, 2013 and Ask Ziggy for the five month period August 1, 2013 through December 28, 2013. As of December 26, 2015 and December 27, 2014, the Company no longer has any equity-method investments with value in the financial statements.
 
 
2013
Current assets
$
7,769,000

Noncurrent assets
10,663,000

Current liabilities
1,207,000

Revenues
5,085,000

Margin loss
(2,501,000
)
Loss from operations
(6,114,000
)
Net loss
(5,526,000
)

The Company has a $15.0 million note receivable as a result of the sale of its III-V product line and investment in KTC, which was paid on January 15, 2016.
The Company has a loan to a non-officer employee for approximately $140,000 at December 26, 2015 and December 27, 2014, which is currently due.
Business Combinations
Business Combinations
Business Combinations
Kopin Software Ltd.
In the fourth quarter of 2015, the Company increased its ownership in Kopin Software Ltd. from 58% to 100% and acquired 17.5% in a new company by paying GBP 1 to a former employee and transferring the rights of certain software programs to the new company. The former employee is a co-founder of the new company. The Company has ascribed an immaterial amount to its investment in the new company.

eMDT
In April 2013, the Company acquired 51% of the outstanding stock of eMDT, a private company, for $400,000. In connection with the acquisition, the Company allocated excess purchase price in the amount of approximately $400,000 to goodwill.  The goodwill will not be deductible for tax purposes. During the second quarter of 2014, the Company paid approximately $0.3 million to acquire an additional 29% ownership in its eMDT subsidiary increasing its ownership percentage to 80%. As of December 26, 2015, the Company has an option to acquire the remaining equity of the Company for $200,000.
Kowon
In 2013, the Company paid approximately $3.7 million to acquire an additional 15% ownership in its Kowon subsidiary which raised its ownership from 78% to 93%.
Goodwill and Intangibles (Notes)
Goodwill and Intangible Assets Disclosure [Text Block]
 Goodwill and Intangibles

The Company’s goodwill balance is as follows: 
 
Fiscal Year Ended
 
December 26, 2015
 
December 27, 2014
Beginning Balance
$
976,451

 
$
1,016,132

Change due to exchange rate fluctuations
(30,369
)
 
(39,681
)
Ending Balance
$
946,082

 
$
976,451


The Company performs impairment tests of goodwill at its reporting unit level. The Company conducts its annual goodwill impairment test on the last day of each fiscal year unless factors indicate that an impairment may have occurred. As of December 26, 2015, the Company performed a qualitative analysis which determined there was no impairment of the Company's goodwill. Goodwill is included in the Kopin reportable segment.
At December 28, 2013, the Company performed a review of the FDD intangibles assets and determined that the customer relationships, technology and trademarks were impaired. The Company performed a remeasurement of the fair value of the intangible assets using the income approach and as a result the Company wrote down the value of the intangible assets by $1.2 million in the year ended December 28, 2013. At December 28, 2013, the Company determined that as a result of a change in the strategic direction of Kopin Software Ltd. the value of its customer relationships were impaired and the Company wrote down the value of the intangible assets by $0.3 million.
The discount rate used was the value-weighted average of the Company’s estimated cost of equity and debt (“cost of capital”) derived using both known and estimated customary market metrics.
The identified intangible assets will be amortized on a straight-line basis over the following lives:
 
Years
Customer relationships
7
Developed technology
7
Trademark portfolio
7

  The Company recognized $0.6 million, $1.0 million and $0.3 million in amortization for the fiscal years ended December 26, 2015, December 27, 2014 and December 28, 2013, respectively.
Financial Instruments
Financial Instruments
Financial Instruments
Fair Value Measurements
Under accounting guidance, financial instruments are categorized as Level 1, Level 2 or Level 3 based upon the method by which their fair value is computed. An investment is categorized as Level 1 when its fair value is based on unadjusted quoted prices in active markets for identical assets that the Company has the ability to access at the measurement date. An investment is categorized as Level 2 if its fair market value is based on quoted market prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, based on observable inputs such as interest rates, yield curves, or derived from or corroborated by observable market data by correlation or other means. An investment is categorized as Level 3 if its fair value is based on assumptions developed by the Company about what a market participant would use in pricing the assets.
The Company’s investments are either held by brokers or in the case of publicly-held corporation, by the Company. The brokers who hold the Company’s investments provide periodic reporting on both the cost and fair value of the securities. The Company performs various procedures to corroborate the fair value provided by the brokers. Debt securities reflected in the table below include investments such as certificates of deposit, commercial paper, corporate bonds, government bonds, and money market fund deposits. When the Company uses observable market prices for identical securities that are traded in less active markets, its debt investments are classified as Level 2. When observable market prices for identical securities are not available, the Company prices the debt investments it owns using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. Non-binding market consensus prices are based on quotes from brokers. The discounted cash flow model uses observable market inputs, such as US treasury-based yield curves.
 
The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets:
 
 
 
 
Fair Value Measurement at December 26, 2015 Using:
 
Total
 
Level 1        
 
Level 2        
 
Level 3        
Money Markets and Cash Equivalents
$
19,767,889

 
$
19,767,889

 
$

 
$

U.S. Government Securities
46,464,663

 
16,381,152

 
30,083,511

 

Corporate Debt
6,886,495

 

 
6,886,495

 

Certificates of Deposit
7,591,733

 

 
7,591,733

 

GCS Holdings
232,037

 
232,037

 

 

 
$
80,942,817

 
$
36,381,078

 
$
44,561,739

 
$

 
 
 
 
Fair Value Measurement at December 27, 2014 Using:
 
Total
 
Level 1        
 
Level 2        
 
Level 3        
Money Markets and Cash Equivalents
$
14,635,802

 
$
14,635,802

 
$

 
$

U.S. Government Securities
57,697,142

 
21,218,340

 
36,478,802

 

Corporate Debt
5,970,983

 

 
5,970,983

 

Certificates of Deposit
12,555,010

 

 
12,555,010

 

Vuzix Corporation
1,500,777

 
1,500,777

 

 

GCS Holdings
180,347

 
180,347

 

 

 
$
92,540,061

 
$
37,535,266

 
$
55,004,795

 
$


The corporate debt consists of floating rate notes with a maturity that is over multiple years but has interest rates which are reset every three months based on the then current three month London Interbank Offering Rate (3 month Libor). The Company evaluates the fair market values of these corporate debt instruments through the use of a model which incorporates the 3 month Libor, the credit default swap rate of the issuer and the bid and ask price spread of same or similar investments which are traded on several markets.
The carrying amounts of cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of their short term nature. The carrying amount of accrued liabilities is classified as Level 2 in the fair value hierarchy.
Marketable Debt Securities
Investments in available-for-sale marketable debt securities are as follows at December 26, 2015 and December 27, 2014: 
 
 
Amortized Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
U.S. government and agency backed securities
$
46,586,224

 
$
57,897,914

 
$

 
$

 
$
(121,561
)
 
$
(200,772
)
 
$
46,464,663

 
$
57,697,142

Corporate debt and certificates of deposits
14,534,247

 
18,564,823

 

 

 
(56,019
)
 
(38,830
)
 
14,478,228

 
18,525,993

Total
$
61,120,471

 
$
76,462,737

 
$

 
$

 
$
(177,580
)
 
$
(239,602
)
 
$
60,942,891

 
$
76,223,135


 
The contractual maturity of the Company’s marketable debt securities is as follows at December 26, 2015:
 
 
Less than
One year
 
One to
Five years
 
Greater than
Five years
 
Total
U.S. government and agency backed securities
$
17,460,832

 
$
23,906,600

 
$
5,097,231

 
$
46,464,663

Corporate debt and certificates of deposits
12,086,055

 
2,392,173

 

 
14,478,228

Total
$
29,546,887

 
$
26,298,773

 
$
5,097,231

 
$
60,942,891


Other-than-Temporary Impairments
The Company reviews its marketable debt securities on a quarterly basis for the presence of other-than-temporary impairment (OTTI).
If the Company determines that an OTTI has occurred it further estimates the amount of OTTI resulting from a decline in the credit worthiness of the issuer (credit-related OTTI) and the amount of non credit-related OTTI. Noncredit-related OTTI can be caused by such factors as market illiquidity. Credit-related OTTI is recognized in earnings while noncredit-related OTTI on securities not expected to be sold is recognized in other comprehensive income (OCI). The Company did not record any OTTI for the fiscal years 2015, 2014 and 2013.
Stockholders' Equity and Stock-Based Compensation
Stockholders' Equity and Stock-Based Compensation
Stockholders’ Equity and Stock-Based Compensation
The Company has stock-based awards outstanding under two plans. In 2001, the Company adopted a 2001 Equity Incentive Plan (the Equity Plan). The Equity Plan authorized 7,100,000 shares of common stock, to be issued to employees, non-employees, and members of the Board of Directors (the Board). The Equity Plan had a ten year life and therefore no new equity awards may be issued under this plan. In 2010, the Company adopted a 2010 Equity Incentive Plan (the 2010 Equity Plan) which authorized the issuance of shares of common stock to employees, non-employees, and the Board. The 2010 Equity Plan has been subsequently amended to increase the number of authorized shares. The number of shares authorized under the 2010 Equity Plan is the number of shares approved by the shareholders plus the number of shares of common stock which were available for grant under the Equity Plan, the number of shares of common stock which were the subject of awards outstanding under the Equity Plan and are forfeited, terminated, canceled or expire after the adoption of the 2010 Equity Plan and the number of shares of common stock delivered to the Company either in exercise of an Equity Plan award or in satisfaction of a tax withholding obligation. The option price of statutory incentive stock options shall not be less than 100% of the fair market value of the stock at the date of grant, or in the case of certain statutory incentive stock options, at 110% of the fair market value at the time of the grant. The option price of nonqualified stock options is determined by the Board or Compensation Committee. Options must be exercised within a ten-year period or sooner if so specified within the option agreement. The term and vesting period for restricted stock awards and options granted under the 2010 Equity Plan are determined by the Board’s compensation committee.
The Company has approximately 2.2 million shares of common stock authorized and available for issuance under the Company’s 2010 Equity Plan.

In March 2013, the Company’s Board of Directors authorized the repurchase of the Company’s common stock in open market or negotiated transactions through March 2014. During the period March 2013 through March 2014 the Company purchased 2,241,121 shares of its common stock for $8,290,573.
Stock Options
A summary of stock option activity under the stock award plans as of December 26, 2015 and changes during the twelve month period is as follows:
 
2015
 
Shares
 
Weighted
Average
Exercise
Price
Balance, beginning of year
130,500

 
$
3.49

Options forfeited/canceled
(125,358
)
 
3.50

Options exercised
(5,142
)
 
3.16

Balance, end of year

 
$



The Company has no stock options outstanding at December 26, 2015 and no stock options were issued in 2015, 2014 or 2013. The intrinsic value of options exercised in 2015, 2014 and 2013 was approximately $0, $26,000 and $0, respectively. The Company issued warrants to purchase 200,000 shares of the Company’s stock at $3.49 which were exercised on a cashless basis in 2015.
 
Cash received from option and warrant exercises under all share-based payment arrangements was approximately $0.1 million for fiscal year 2015. No tax benefits were realized during the three year period ended 2015 due to the existence of tax net operating loss carryforwards.
NonVested Restricted Common Stock
The Company has issued shares of nonvested restricted common stock to certain employees. Each award requires the employee to fulfill certain obligations, including remaining employed by the Company for one, two or four years (the vesting period) and in certain cases also meeting performance criteria. A summary of the activity for nonvested restricted common stock awards as of December 26, 2015 and changes during the twelve months then ended is presented below:
 
 
Shares
 
Weighted
Average
Grant
Fair Value
Balance, December 27, 2014
2,551,631

 
$
3.75

Granted
1,255,696

 
3.77

Forfeited
(388,320
)
 
3.64

Vested
(1,226,991
)
 
3.68

Balance, December 26, 2015
2,192,016

 
$
3.82



Subsequent to the year ended December 27, 2014, the Company identified an error in its calculation of the weighted average grant fair value of issued restricted stock outstanding as of December 27, 2014. The Company had disclosed a weighted average grant fair value of $4.41 in its Form 10-K for the year ended December 27, 2014, however the correct weighted average grant fair value was $3.75.
           
During the three month period ended June 27, 2015, the performance conditions for 50,000 awards granted in 2014 were determined and achieved.

The forfeitures in 2015 were primarily due to fact that the performance criteria were not met related to these awards.
Stock-Based Compensation
The following table summarizes stock-based compensation expense related to employee stock options and nonvested restricted common stock awards for the fiscal years 2015, 2014 and 2013 (no tax benefits were recognized):
 
 
2015
 
2014
 
2013
Cost of component revenues
$
729,715

 
$
766,221

 
$
414,842

Research and development
776,946

 
965,945

 
423,548

Selling, general and administrative
1,638,818

 
3,095,606

 
3,365,018

Total
$
3,145,479

 
$
4,827,772

 
$
4,203,408


Total unrecognized compensation expense for the nonvested restricted common stock as of December 26, 2015 is $4.4 million and is expected to be recognized over a period of two years.
Concentrations of Risk
Concentrations of Risk
Concentrations of Risk
 
Ongoing credit evaluations of customers’ financial condition are performed and collateral, such as letters of credit, are generally not required. The following table depicts the customer’s trade receivable balance as a percentage of gross trade receivables as of the end of the year indicated. (The symbol “*” indicates that accounts receivables from that customer were less than 10% of the Company’s total accounts receivable.)
 
Percent of Gross
Accounts Receivable
Customer
2015
 
2014
Company A
*
 
32
Company B
21
 
14
Company C
*
 
9
Company D
15
 
*
Company E
*
 
1
Company F
*
 
5
Company G
*
 
8
Sales to significant non-affiliated customers for fiscal years 2015, 2014 and 2013, as a percentage of total revenues, is shown in the table below. Note the caption “Military Customers in Total” in the table below excludes research and development contracts. The Company sells its displays to Japanese customers through Ryoden Trading Company. (The symbol “*” indicates that sales to that customer were less than 10% of the Company’s total revenues.)
 
Sales as a Percent
of Total Revenue
 
Fiscal Year
Customer
2015
 
2014
 
2013
Military Customers in Total
32
 
45
 
38
Company A
18
 
26
 
13
Company C
22
 
11
 
*
Company E
*
 
*
 
18
Funded Research and Development Contracts
12
 
4
 
7
Income Taxes
Income Taxes
Income Taxes
The (benefit) provision for income taxes from continuing operations consists of the following for the fiscal years indicated: 
 
Fiscal Year
 
2015
 
2014
 
2013
Current
 
 
 
 
 
Federal
$

 
$

 
$
(13,124,000
)
State
50,000

 
50,000

 
12,000

Foreign

 

 
(34,000
)
Total current provision (benefit)
50,000

 
50,000

 
(13,146,000
)
Deferred
 
 
 
 
 
Federal
(5,356,000
)
 
(9,554,000
)
 
(3,616,000
)
State
(62,000
)
 
(1,709,000
)
 
644,000

Foreign
188,000

 
411,000

 
(565,000
)
Change in valuation allowance
5,155,000

 
10,622,000

 
3,750,000

Total deferred (benefit) provision
(75,000
)
 
(230,000
)
 
213,000

Total (benefit) provision for income taxes
$
(25,000
)
 
$
(180,000
)
 
$
(12,933,000
)

Net operating losses were not utilized in 2015, 2014 and 2013 to offset federal and state taxes.
The actual income tax (benefit) provision reported from operations are different than those which would have been computed by applying the federal statutory tax rate to loss before income tax (benefit) provision. A reconciliation of income tax (benefit) provision from continuing operations as computed at the U.S. federal statutory income tax rate to the provision for income tax benefit is as follows:
 
Fiscal Year
 
2015
 
2014
 
2013
Tax provision at federal statutory rates
$
(5,187,000
)
 
$
(9,964,000
)
 
$
(13,322,000
)
State tax liability
33,000

 
33,000

 
8,000

Foreign deferred
153,000

 
371,000

 
(644,000
)
Foreign withholding
(75,000
)
 
(196,000
)
 
308,000

Outside basis in KTC and Kowon, net
(180,000
)
 
(394,000
)
 
(202,000
)
Nondeductible expenses
(402,000
)
 
(21,000
)
 
306,000

Increase in net state operating loss carryforwards
(158,000
)
 
(177,000
)
 
(2,868,000
)
Utilization of net operating losses for U.K. research and development refund
719,000

 
1,089,000

 

Provision to tax return adjustments and state tax rate change
264,000

 
(516,000
)
 
(33,000
)
Tax credits
(501,000
)
 
(610,000
)
 
(390,000
)
Non-deductible 162M compensation limitations
40,000

 
196,000

 
558,000

Non-deductible equity compensation
(34,000
)
 
(687,000
)
 
(418,000
)
Other, net
148,000

 
74,000

 
14,000

Change in valuation allowance
5,155,000

 
10,622,000

 
3,750,000

 
$
(25,000
)
 
$
(180,000
)
 
$
(12,933,000
)

Pretax foreign losses from continuing operations were approximately $(968,000), $(2,588,000) and $(4,966,000) for fiscal years 2015, 2014 and 2013, respectively. The Company has made the decision to close Kowon and accordingly reflected a liability for unremitted earnings.
The benefit for income taxes for the fiscal year ended 2015 of $25,000 represents the net of state and foreign withholding tax.

Deferred income taxes are provided to recognize the effect of temporary differences between tax and financial reporting. Deferred income tax assets and liabilities consist of the following:
 
 
Fiscal Year
 
2015
 
2014
Deferred tax liability:
 
 
 
       Foreign withholding liability
$
(1,207,000
)
 
$
(1,282,000
)
       Foreign unremitted earnings
(2,701,000
)
 
(2,882,000
)
Deferred tax assets:
 
 
 
Federal net operating loss carryforwards
28,984,000

 
22,758,000

State net operating loss carryforwards
1,913,000

 
1,689,000

Foreign net operating loss carryforwards
2,430,000

 
2,612,000

Equity awards
2,249,000

 
2,508,000

Tax credits
6,768,000

 
6,267,000

Equipment
1,113,000

 
1,024,000

Investments
3,240,000

 
5,279,000

Other
3,667,000

 
3,253,000

Net deferred tax assets
46,456,000

 
41,226,000

Valuation allowance
(47,663,000
)
 
(42,508,000
)
 
$
(1,207,000
)
 
$
(1,282,000
)

As of December 26, 2015, the Company has available for tax purposes federal net operating loss carryforwards (NOLs) of $82.8 million expiring through 2035. The Company has recognized a full valuation allowance on its net deferred tax assets as the Company has concluded that such assets are not more likely than not to be realized. The $5.2 million increase in valuation allowance during fiscal year 2015 was primarily due to an increase in net operating loss carryforwards. The 10.6 million increase in valuation allowance during fiscal year 2014 was primarily due to net operating losses generated of $21.4 million and the sale of III-V assets. The Company has not historically recorded, nor does it intend to record the tax benefits from stock awards until realized. Unrecorded benefits from stock awards approximated $10.3 million at December 26, 2015.
The Company has suspended operations and terminated the majority of employees at its Korean subsidiary, Kowon. The assets, primarily buildings and land, have been put up for sale. It is more likely than not that the Company's share of the net book value of its Korean investment would be repatriated to the U.S. resulting in a Korean withholding tax of $1.2 million. As a result of the Company no longer being permanently reinvested in Korea, a deferred tax liability for the unremitted earnings in the Korean subsidiary has been booked for $2.7 million.

In September 2013, the U.S. Department of the Treasury and the Internal Revenue Service released final regulations relating to guidance on applying tax rules to amounts paid to acquire, produce or improve tangible personal property as well as rules for materials and supplies. The Company is currently assessing these rules and the impacts to the financial statements, if any.
The Company’s income tax returns have not been examined by the Internal Revenue Service and are subject to examination for all years since 2001. State income tax returns are generally subject to examination for a period of three to five years after filing of the respective return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states.
International jurisdictions have statutes of limitations generally ranging from three to seven years after filing of the respective return. Years still open to examination by tax authorities in major jurisdictions include Korea (2007 onward), Japan (2007 onward), Hong Kong (2009 onward) and United Kingdom (2012 onward). The Company is not currently under examination in these jurisdictions.
Accrued Warranty
Accrued Warranty
Accrued Warranty
The Company warrants its products against defect for 12 months. A provision for estimated future costs and estimated returns for credit relating to warranty is recorded in the period when product is shipped and revenue recognized, and is updated as additional information becomes available. The Company’s estimate of future costs to satisfy warranty obligations is based primarily on historical warranty expense experienced and a provision for potential future product failures. Changes in the accrued warranty for fiscal years 2015 and 2014 are as follows:
 
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
Beginning Balance
$
716,000

 
$
716,000

Additions
598,000

 
798,000

Claim and reversals
(796,000
)
 
(798,000
)
Ending Balance
$
518,000

 
$
716,000

Employee Benefit Plan
Employee Benefit Plan
Employee Benefit Plan
The Company has an employee benefit plan pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended. In 2015, the plan allowed employees to defer an amount of their annual compensation up to a current maximum of $18,000 if they are under the age of 50 and $24,000 if they are over the age of 50. The Company matches 50% of all deferred compensation on the first 6% of each employee’s deferred compensation. The amount charged to operations in connection with this plan was approximately $324,000, $224,000 and $146,000 in fiscal years 2015, 2014 and 2013, respectively.
Commintments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Leases
The Company leases facilities located in Westborough, Massachusetts, Santa Clara, California, Scotts Valley, California, Dalgety Bay, Scotland and Nottingham, United Kingdom, under non-cancelable operating leases. The Westborough lease expires in 2023. The Santa Clara lease expires in 2016. The Scotts Valley lease expires in 2018. The Dalgety Bay lease expires in 2016. The Company also leases two facilities in Nottingham, United Kingdom which expire in 2016 and 2017. Substantially all real estate taxes, insurance and maintenance expenses under these leases are the Company’s obligations and are expensed as incurred and were immaterial. The following is a schedule of minimum rental commitments under non-cancelable operating leases at December 26, 2015:
 
Fiscal Year ending,
Amount
2016
$
1,097,000

2017
800,000

2018
666,000

2019
639,000

2020
637,000

Thereafter
1,492,000

Total minimum lease payments
$
5,331,000


Amounts incurred under operating leases are recorded as rent expense on a straight-line basis and aggregated approximately $1.7 million in fiscal year 2015, $1.7 million in fiscal year 2014 and $1.3 million in fiscal year 2013.
Other Agreements
The Company has entered into various license agreements which require payment of royalties based upon a set percentage of product sales, subject in some cases, to certain minimum amounts. Total royalty expense approximated $22,000, $37,000 and $20,000, respectively, in fiscal years 2015, 2014 and 2013.
In 2015, the Company entered into an agreement with the intent to purchase approximately 2% of a company for approximately $2.5 million, subject to certain government approvals and agreement on valuation.
Litigation
Litigation
Litigation
The Company may engage in legal proceedings arising in the ordinary course of business. Claims, suits, investigations and proceedings are inherently uncertain and it is not possible to predict the ultimate outcome of such matters and our business, financial condition, results of operations or cash flows could be affected in any particular period.
Segments and Geographical Information
Segments and Geographical Information
Segments and Geographical Information
The Company’s chief operating decision maker is its Chief Executive Officer. The Company has determined it has two reportable segments, FDD, the manufacturer of its reflective display products for test and simulation products, and Kopin, which is comprised of Kopin Corporation, Kowon, Kopin Software Ltd. and eMDT.
 
Kopin
 
FDD
 
Total
2015
 
 
 
 
 
Revenues
$
28,538

 
$
3,516

 
$
32,054

Net loss attributable to the controlling interest
(13,429
)
 
(1,264
)
 
(14,693
)
Total assets from continuing operations
104,677

 
1,524

 
106,201

Long-lived assets from continuing operations
2,639

 
38

 
2,677

Property and plant held for sale
819

 

 
819

2014
 
 
 
 
 
Revenues
$
28,333

 
$
3,474

 
$
31,807

Net loss attributable to the controlling interest
(26,402
)
 
(1,810
)
 
(28,212
)
Total assets from continuing operations
121,301

 
1,640

 
122,941

Long-lived assets from continuing operations
4,343

 
246

 
4,589

2013
 
 
 
 
 
Revenues
$
19,883

 
$
3,014

 
$
22,898

Net loss attributable to the controlling interest
(2,003
)
 
(2,707
)
 
(4,710
)
Total assets from continuing operations
143,953

 
2,179

 
146,132

Long-lived assets from continuing operations
5,488

 
547

 
6,035


Geographical revenue information for the three years ended December 26, 2015December 27, 2014 and December 28, 2013 was based on the location of the customers and is as follows: 
 
Fiscal Year
 
2015
 
2014
 
2013
 
Revenue
 
% of Total
 
Revenue
 
% of Total
 
Revenue
 
% of Total
US
$
21,758,000

 
68
%
 
$
19,695,000

 
62
%
 
$
11,927,000

 
53
%
Other Americas
395,000

 
1
%
 
416,000

 
1
%
 
230,000

 
1
%
Total Americas
22,153,000

 
69
%
 
20,111,000

 
63
%
 
12,157,000

 
54
%
Asia-Pacific
7,160,000

 
22
%
 
8,245,000

 
26
%
 
8,292,000

 
36
%
Europe
2,741,000

 
9
%
 
3,451,000

 
11
%
 
2,449,000

 
10
%
  Total Revenues
$
32,054,000

 
100
%
 
$
31,807,000

 
100
%
 
$
22,898,000

 
100
%



Long-lived assets by geographic area are as follows:
 
Fiscal Years
 
2015
 
2014
United States of America
$
2,613,000

 
$
2,689,000

United Kingdom
64,000

 
377,000

Republic of Korea

 
1,523,000

 
$
2,677,000

 
$
4,589,000

Selected Quarterly Financial Information (Unaudited)
Selected Quarterly Financial Information (Unaudited)
Selected Quarterly Financial Information (Unaudited)
The following tables present Kopin’s quarterly operating results for the fiscal years ended December 26, 2015 and December 27, 2014. The information for each of these quarters is unaudited and has been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, all necessary adjustments, consisting only of normal recurring adjustments, have been included to present fairly the unaudited consolidated quarterly results when read in conjunction with Kopin’s audited consolidated financial statements and related notes. These operating results are not necessarily indicative of the results of any future period.
Quarterly Periods During Fiscal Year Ended December 26, 2015: 

 
Three months
ended
March 28,
2015 (3)
 
Three months
ended
June 27,
2015 (4)
 
Three months ended September 26, 2015
 
Three months
ended
December 26,
2015
 
(In thousands, except per share data)
Revenue
$
8,585

 
$
10,857

 
$
8,001

 
$
4,612

Gross profit (2)
$
1,845

 
$
3,127

 
$
1,762

 
$
(170
)
Loss from operations
$
(5,945
)
 
$
(5,495
)
 
$
(5,923
)
 
$
(7,958
)
Net (loss) gain attributable to the controlling interest
$
(3,838
)
 
$
781

 
$
(4,675
)
 
$
(6,961
)
Net (loss) gain per share from continuing operations (1):
 
 
 
 
 
 
 
Basic
$
(0.06
)
 
$
0.01

 
$
(0.07
)
 
$
(0.11
)
Diluted
$
(0.06
)
 
$
0.01

 
$
(0.07
)
 
$
(0.11
)
Shares used in computing net loss per share from continuing operations:
 
 
 
 
 
 
 
Basic
63,084

 
63,066

 
63,068

 
63,608

Diluted
63,084

 
65,030

 
63,068

 
63,608

 
(1)
Net loss per share is computed independently for each of the quarters presented; accordingly, the sum of the quarterly net income per share may not equal the total computed for the year.
(2)
Gross profit is defined as net product revenue less cost of product revenues.
(3)
Includes $2.1 million impact on net gain attributable to the controlling interest relating to the gain on sale of an investment for the three month period ended March 28, 2015.
(4)
Includes $5.5 million impact on net gain attributable to the controlling interest relating to the gain on sale of an investment for the three month period ended June 27, 2015.
 
Quarterly Periods During Fiscal Year Ended December 27, 2014:

 
Three months ended March 29, 2014
 
Three months ended June 28, 2014
 
Three months ended September 27, 2014
 
Three months
ended
December 28,
2013 (3)
 
(In thousands, except per share data)
Revenue
$
4,695

 
$
6,943

 
$
9,532

 
$
10,637

Gross profit (2)
$
2

 
$
753

 
$
3,861

 
$
2,701

(Loss) income from continuing operations
$
(9,614
)
 
$
(7,269
)
 
$
(5,520
)
 
$
(6,073
)
Net loss attributable to the controlling interest
$
(9,134
)
 
$
(8,806
)
 
$
(4,469
)
 
$
(5,302
)
Net loss per share from continuing operations (1):
 
 
 
 
 
 
 
Basic
$
(0.15
)
 
$
(0.14
)
 
$
(0.08
)
 
$
(0.08
)
Diluted
$
(0.15
)
 
$
(0.14
)
 
$
(0.08
)
 
$
(0.08
)
Shares used in computing net loss per share from continuing operations:
 
 
 
 
 
 
 
Basic
62,530

 
62,644

 
62,647

 
62,734

Diluted
62,530

 
62,644

 
62,647

 
62,734

 
(1)
Net loss per share is computed independently for each of the quarters presented; accordingly, the sum of the quarterly net income per share may not equal the total computed for the year.
(2)
Gross profit is defined as net component revenue less cost of component revenues.
(3)
Includes $1.3 million impact in loss from operations and net loss attributable to the controlling interest attributable to the write off of an investment for the three month period ended June 28, 2014, as described in Note 4.
Schedule II - Valuation and Qualifying Accounts
Schedule II - Valuation and Qualifying Accounts
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
Fiscal Years Ended December 26, 2015December 27, 2014 and December 28, 2013
 
Description
Balance at
Beginning
of Year
 
Additions
Charged
to
Income
 
Deductions
from
Reserve
 
Balance at
End of
Year
Reserve deducted from assets—allowance for doubtful accounts:
 
 
 
 
 
 
 
2013
$
311,000

 
$
19,000

 
$
(128,000
)
 
$
202,000

2014
202,000

 
81,000

 
(17,000
)
 
266,000

2015
266,000

 

 
(113,000
)
 
153,000

Summary of Significant Accounting Policies (Policies)
Principles of Consolidation
The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, a majority owned 93% subsidiary, Kowon Technology Co., Ltd. (Kowon), located in Korea, and a majority owned 80% subsidiary, eMDT America Inc (eMDT), located in California (collectively the Company). In the fourth quarter of 2015, the Company increased its investment in Kopin Software Ltd. (KSL) (formerly Intoware Ltd.) from 58% to 100%. Net loss attributable to noncontrolling interest in the Company's consolidated statement of operations represents the portion of the results of operations of Kowon and eMDT for the twelve month period ended December 26, 2015 and for the period of time during 2015 when the Company owned 58% of KSL, which is allocated to the shareholders of the equity interests not owned by the Company. All intercompany transactions and balances have been eliminated. Investments in business entities in which the Company does not have control but has the ability to exercise significant influence over operating and financial policies are accounted for by the equity method.
The Company ceased its production activities at its Kowon facility in 2013 and commenced offering the facility for sale. The Company believes the facility will be sold within the next 12 months and has classified the facility as non-current assets held for sale.
Revenue Recognition
The Company recognizes revenue if four basic criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred and services rendered; (3) the price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. The Company does not recognize revenue for products prior to customer acceptance unless it believes the product meets all customer specifications and the Company has a history of consistently achieving customer acceptance of the product. Provisions for product returns and allowances are recorded in the same period as the related revenues. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of product when evaluating the adequacy of sales returns and other allowances. Certain product sales are made to distributors under agreements allowing for a limited right of return on unsold products. Sales to distributors are primarily made for sales to the distributors' customers and not for their stocking of inventory. The Company delays revenue recognition for its estimate of distributor claims of right of return on unsold products based upon its historical experience with the Company’s products and specific analysis of amounts subject to return based upon discussions with the Company’s distributors or their customers.
The Company recognizes revenues from long-term research and development contracts on the percentage-of-completion method of accounting as work is performed, based upon the ratio of costs or hours already incurred to the estimated total cost of completion or hours of work to be performed. Revenue recognized at any point in time is limited to the amount funded by the U.S. government or contracting entity. The Company accounts for product development and research contracts that have established prices for distinct phases as if each phase were a separate contract. In some instances, the Company is contracted to create a deliverable which is anticipated to be qualified and go into full rate production stages. In those cases, the revenue recognition methodology will change from the percentage of completion method to the units-of-delivery method as new contracts are received after formal qualification has been completed. Under certain of its research and development contracts, the Company recognizes revenue on a milestone methodology.  This revenue is recognized when the Company achieves specified milestones based on its past performance.
 
The Company classifies amounts earned on contracts in progress that are in excess of amounts billed as unbilled receivables and classifies amounts received in excess of amounts earned as billings in excess of revenues earned. The Company invoices based on dates specified in the related agreement or in periodic installments based upon its invoicing cycle. The Company recognizes the entire amount of an estimated ultimate loss in its financial statements at the time the loss on a contract becomes known.
Research and Development Costs
Research and development expenses are incurred in support of internal display product development programs or programs funded by agencies or prime contractors of the U.S. government and commercial partners. Research and development costs include staffing, purchases of materials and laboratory supplies, circuit design costs, fabrication and packaging of experimental display products, and overhead, and are expensed immediately.
Cash and equivalents and Marketable securities
The Company considers all highly liquid, short-term debt instruments with original maturities of three months or less to be cash equivalents.
Marketable debt securities consist primarily of commercial paper, medium-term corporate notes, and United States government and agency backed securities. The Company classifies these marketable debt securities as available-for-sale at fair value in “Marketable debt securities, at fair value.” The investments in Vuzix Corporation (Vuzix) and GCS Holdings are included in "Other Assets" as available-for-sale and at fair value. The Company records the amortization of premium and accretion of discounts on marketable debt securities in the results of operations.
The Company uses the specific identification method as a basis for determining cost and calculating realized gains and losses with respect to marketable debt securities. The gross gains and losses realized related to sales of marketable debt securities were not material during fiscal years 2015, 2014 and 2013
Inventory
Inventory is stated at the lower of cost (determined on the first-in, first-out method) or market and consists of the following at December 26, 2015 and December 27, 2014:
 
2015
 
2014
Raw materials
$
844,475

 
$
2,057,202

Work-in-process
1,281,891

 
1,551,799

Finished goods
386,107

 
472,885

 
$
2,512,473

 
$
4,081,886

Property, plant and equipment
Property, plant and equipment are recorded at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets, generally 3 to 10 years. Leasehold improvements and leased equipment are amortized over the shorter of the term of the lease or the useful life of the improvement or equipment. As discussed below, obligations for asset retirement are accrued at the time property, plant and equipment is initially purchased or as such obligations are generated from use.
Intangible assets

At December 26, 2015 and December 27, 2014, intangible assets consisted of patents. Identifiable intangible assets are amortized using the straight-line method over the estimated useful lives of the assets, generally three to seven years.
Assets held for sale
Assets held for sale as of December 26, 2015 consist of land with a cost of $0.8 million and buildings with a cost and net book value of $2.1 million and $0.0 million, respectively, located at the Company’s subsidiary Kowon. Kowon is included in the Kopin segment. The Company did not reclassify its presentation for the December 27, 2014 balance sheet.
Product Warranty
The Company generally sells products with a limited warranty of product quality and a limited indemnification of customers against intellectual property infringement claims related to the Company’s products. The Company accrues for known warranty and indemnification issues if a loss is probable and can be reasonably estimated, and accrues for estimated incurred but unidentified issues based on historical activity. As of December 26, 2015 and December 27, 2014, the Company had warranty reserves of $0.5 million and $0.7 million respectively. For the fiscal years 2015, 2014 and 2013 warranty claims and reversals were approximately $0.8 million, $0.4 million and $0.8 million, respectively.
Asset Retirement Obligations
The Company recorded asset retirement obligations (ARO) liabilities of $0.3 million at December 26, 2015 and December 27, 2014, respectively. This represents the legal obligations associated with retirement of the Company’s assets when the timing and/or method of settling the obligation are conditional on a future event that may or may not be within the control of the Company.
 
2015
 
2014
Beginning balance
$
311,187

 
$
329,435

Additions

 

Charges

 

Exchange rate change
(12,724
)
 
(18,248
)
Ending balance
$
298,463

 
$
311,187

Income Taxes
The consolidated financial statements reflect provisions for federal, state, local and foreign income taxes. The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as operating loss and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company provides valuation allowances if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Foreign Currency
Assets and liabilities of non-U.S. operations where the functional currency is other than the U.S. dollar are translated from the functional currency into U.S. dollars at year end exchange rates, and revenues and expenses at average rates prevailing during the year. Resulting translation adjustments are accumulated as part of accumulated other comprehensive income. Transaction gains or losses are recognized in income or loss in the period in which they occur.
Net (Loss) Income Per Share
Basic net (loss) income per share is computed using the weighted-average number of shares of common stock outstanding during the period less any unvested restricted shares. Diluted earnings per common share is calculated using weighted-average shares outstanding and contingently issuable shares, less weighted-average shares reacquired during the period. The net outstanding shares are adjusted for the dilutive effect of shares issuable upon the assumed conversion of the Company’s common stock equivalents, which consist of outstanding stock options and unvested restricted stock.
Weighted-average common shares outstanding used to calculate earnings per share, is as follows:
 
 
2015
 
2014
 
2013
Weighted-average common shares outstanding—basic
63,465,797

 
62,638,675

 
62,347,852

Stock options and nonvested restricted common stock

 

 

Weighted-average common shares outstanding—diluted
63,465,797

 
62,638,675

 
62,347,852


The following were not included in weighted-average common shares outstanding-diluted because they are anti-dilutive or performance conditions have not been met at the end of the period.
 
 
2015
 
2014
 
2013
Nonvested restricted common stock
2,192,016

 
2,551,631

 
3,024,148

Stock options

 
130,500

 
558,850

Total
2,192,016

 
2,682,131

 
3,582,998


    
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk other than marketable securities consist principally of trade accounts receivable. Trade receivables are primarily derived from sales to manufacturers of consumer electronic devices and wireless components or military applications.
The Company primarily invests its excess cash in government backed and corporate financial instruments that management believes to be of high credit worthiness, which bear lower levels of relative credit risk. The Company relies on rating agencies to ascertain the credit worthiness of its marketable securities and, where applicable, guarantees by the Federal Deposit Insurance Company. The Company sells its products to customers worldwide and generally does not require collateral. The Company maintains a reserve for potential credit losses.
Fair Value of Financial Instruments
Financial instruments consist of current assets (except inventories, income tax receivables and prepaid assets) and certain current liabilities. Current assets (excluding marketable securities which are recorded at fair value) and current liabilities are carried at cost, which approximates fair value.
Stock-Based Compensation
The fair value of stock option awards is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. There were no stock options granted in fiscal years 2015, 2014 or 2013.
 
The fair value of nonvested restricted common stock awards is generally the market value of the Company’s equity shares on the date of grant. The nonvested restricted common stock awards require the employee to fulfill certain obligations, including remaining employed by the Company for one, two or four years (the vesting period) and in certain cases also require meeting either performance criteria or the Company’s stock achieving a certain price. The performance criteria primarily consist of the achievement of established milestones. For nonvested restricted common stock awards which solely require the recipient to remain employed with the Company, the stock compensation expense is amortized over the anticipated service period. For nonvested restricted common stock awards which require the achievement of performance criteria, the Company reviews the probability of achieving the performance goals on a periodic basis. If the Company determines that it is probable that the performance criteria will be achieved, the amount of compensation cost derived for the performance goal is amortized over the service period. If the performance criteria are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. The Company recognizes compensation costs on a straight-line basis over the requisite service period for time vested awards.

On February 13, 2015, the Company modified the termination date of certain restricted stock grants previously made to Dr. Fan, the Company’s President and Chief Executive Officer. In 2011, the Company granted Dr. Fan 260,000 shares of restricted stock which will vest upon the first 10 consecutive trading day period following the grant date during which the Company's common stock trades at a price equal to or greater than $5.25 subject to acceleration upon the occurrence of an acceleration event. This grant was originally set to terminate on September 12, 2016. In 2013, the Company granted compensation awards to Dr. Fan that consisted of two grants of 150,000 shares of restricted stock each. One of the grants will vest at the end of the first 10 consecutive trading day period following the grant date during which the Company’s common stock trades at a price per share equal to or greater than $6.00. The other award will vest at the end of the first 10 consecutive trading day period following the grant date during which the Company’s common stock trades at a price per share equal to or greater than $7.00. Both were due to expire in 2023. On December 31, 2014, Dr. Fan entered into a 3-year employment agreement with the Company which expires on December 31, 2017. The Company has amended the three grants to now terminate on December 31, 2017, to be consistent with Dr. Fan's employment agreement.
 
In 2013, the Company granted a compensation award to its Chief Executive Officer that consisted of a grant of 300,000 shares of restricted stock that would vest upon the Company shipping 25,000 units of a new display. The Company shipped the displays in 2015 and the award vested.
Comprehensive Loss
Comprehensive loss is the total of net (loss) income and all other non-owner changes in equity including such items as unrealized holding (losses) gains on marketable equity and debt securities classified as available-for-sale and foreign currency translation adjustments.

The components of accumulated other comprehensive income are as follows:
 
Cumulative
Translation
Adjustment
 
Unrealized Holding
 Gain (Loss) on
Marketable
Securities
 
Acquisition of Minority Interest in KSL
 
Accumulated Other
Comprehensive
Income
Balance as of December 29, 2012
$
3,542,104

 
$
2,970,688

 
$

 
$
6,512,792

Changes during year
(1,017,403
)
 
(2,053,392
)
 

 
(3,070,795
)
Balance as of December 28, 2013
2,524,701

 
917,296

 

 
3,441,997

Changes during year
(990,626
)
 
674,868

 

 
(315,758
)
Balance as of December 27, 2014
1,534,075

 
1,592,164

 

 
3,126,239

Changes during year
(1,001,733
)
 
(1,386,415
)
 
33,683

 
(2,354,465
)
Balance as of December 26, 2015
$
532,342

 
$
205,749

 
$
33,683

 
$
771,774

Impairment of Long-Lived Assets
The Company periodically reviews the carrying value of its long-lived assets to determine if facts and circumstances suggest that they may be impaired or that the amortization or depreciation period may need to be changed. The carrying value of a long-lived asset is considered impaired when the anticipated identifiable undiscounted cash flows from such asset are less than its carrying value. For assets that are to be held and used, impairment is measured based upon the amount by which the carrying amount of the asset exceeds its fair value. The carrying value of the Company’s long-lived assets was $2.7 million at December 26, 2015.
Recently Issued Accounting Pronouncements
Revenue from Contracts with Customers
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This new standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In addition, ASU 2014-09 provides guidance on accounting for certain revenue-related costs including, but not limited to, when to capitalize costs associated with obtaining and fulfilling a contract. The standard also requires certain new disclosures. The standard was effective for annual and interim reporting periods beginning after December 15, 2016.
In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers. The amendments in this ASU defer the effective date of ASU 2014-09. Public companies should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the expected impact of this new guidance on its consolidated financial statements and available adoption methods.
Balance Sheet Reclassification of Deferred Taxes
In November 2015, the FASB issued ASU 2015-17,  Balance Sheet Classification of Deferred Taxes, which will require entities to present all deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) as non-current on the balance sheet. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted, and entities may choose whether to adopt this update prospectively or retrospectively. The Company has evaluated ASU 2015-17 and determined that its adoption will not have a material effect on its financial position or earnings.
On December 26, 2015, the Company elected to adopt ASU 2015-17 and change its method of classifying DTAs and DTLs as either current or non-current to classifying all DTAs and DTLs as non-current, and has chosen to apply a prospective method. The prior balance sheet as of December 27, 2014 was not retrospectively adjusted as there was no impact to its historical presentation.

Statement of Comprehensive Income

During the twelve months ended December 26, 2015, the change in the Company's accumulated other comprehensive income was the net of $(1.0) million cumulative translation adjustment, $0.1 million unrealized holding gains on marketable securities and $(1.5) million of reclassified holding gains
Summary of Significant Accounting Policies (Tables)
Inventory is stated at the lower of cost (determined on the first-in, first-out method) or market and consists of the following at December 26, 2015 and December 27, 2014:
 
2015
 
2014
Raw materials
$
844,475

 
$
2,057,202

Work-in-process
1,281,891

 
1,551,799

Finished goods
386,107

 
472,885

 
$
2,512,473

 
$
4,081,886

The Company recorded asset retirement obligations (ARO) liabilities of $0.3 million at December 26, 2015 and December 27, 2014, respectively. This represents the legal obligations associated with retirement of the Company’s assets when the timing and/or method of settling the obligation are conditional on a future event that may or may not be within the control of the Company.
 
2015
 
2014
Beginning balance
$
311,187

 
$
329,435

Additions

 

Charges

 

Exchange rate change
(12,724
)
 
(18,248
)
Ending balance
$
298,463

 
$
311,187

Weighted-average common shares outstanding used to calculate earnings per share, is as follows:
 
 
2015
 
2014
 
2013
Weighted-average common shares outstanding—basic
63,465,797

 
62,638,675

 
62,347,852

Stock options and nonvested restricted common stock

 

 

Weighted-average common shares outstanding—diluted
63,465,797

 
62,638,675

 
62,347,852

The following were not included in weighted-average common shares outstanding-diluted because they are anti-dilutive or performance conditions have not been met at the end of the period.
 
 
2015
 
2014
 
2013
Nonvested restricted common stock
2,192,016

 
2,551,631

 
3,024,148

Stock options

 
130,500

 
558,850

Total
2,192,016

 
2,682,131

 
3,582,998

The components of accumulated other comprehensive income are as follows:
 
Cumulative
Translation
Adjustment
 
Unrealized Holding
 Gain (Loss) on
Marketable
Securities
 
Acquisition of Minority Interest in KSL
 
Accumulated Other
Comprehensive
Income
Balance as of December 29, 2012
$
3,542,104

 
$
2,970,688

 
$

 
$
6,512,792

Changes during year
(1,017,403
)
 
(2,053,392
)
 

 
(3,070,795
)
Balance as of December 28, 2013
2,524,701

 
917,296

 

 
3,441,997

Changes during year
(990,626
)
 
674,868

 

 
(315,758
)
Balance as of December 27, 2014
1,534,075

 
1,592,164

 

 
3,126,239

Changes during year
(1,001,733
)
 
(1,386,415
)
 
33,683

 
(2,354,465
)
Balance as of December 26, 2015
$
532,342

 
$
205,749

 
$
33,683

 
$
771,774

Discontinued Operations (Tables)
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures
The following table summarizes the results from discontinued operations:
 
 
 
December 28, 2013
Net product and research and development revenues
$
2.3

(Loss) gain from discontinued operations before income taxes
(0.2
)
(Provision) benefit for income taxes on discontinued operations

Discontinued operations, net of tax
(0.2
)
Gain on sale, net of $13.1 million of tax
20.4

Income from discontinued operations, net of tax
$
20.2



Property, Plant and Equipment (Tables)
Property, Plant and Equipment
Property, plant and equipment consisted of the following at December 26, 2015 and December 27, 2014:
 
 
Useful Life
 
2015
 
2014
Land
 
 
$

 
$
877,485

Buildings
10 years
 

 
2,298,367

Equipment
3-5 years
 
18,765,548

 
19,696,919

Leasehold improvements
Life of the lease
 
3,659,559

 
3,652,395

Furniture and fixtures
3 years
 
789,067

 
886,985

Equipment under construction
 
 
312,916

 
657,142

 
 
 
23,527,090

 
28,069,293

Accumulated depreciation and amortization
 
 
(20,849,987
)
 
(23,479,872
)
Net property, plant and equipment
 
 
$
2,677,103

 
$
4,589,421

Other Assets and Amounts Due to / Due From Affiliates (Tables)
Equity losses in unconsolidated affiliates recorded in the consolidated statement of operations are as follows:
 
 
2015
 
2014
 
2013
KoBrite
$

 
$
(102,305
)
 
$
(406,811
)
Ask Ziggy
$
(47,443
)
 
$
(284,137
)
 
$
(218,287
)
Total
$
(47,443
)
 
$
(386,442
)
 
$
(625,098
)
Summarized financial information for 2013 includes Kobrite for the year ended September 30, 2013 and Ask Ziggy for the five month period August 1, 2013 through December 28, 2013. As of December 26, 2015 and December 27, 2014, the Company no longer has any equity-method investments with value in the financial statements.
 
 
2013
Current assets
$
7,769,000

Noncurrent assets
10,663,000

Current liabilities
1,207,000

Revenues
5,085,000

Margin loss
(2,501,000
)
Loss from operations
(6,114,000
)
Net loss
(5,526,000
)
Goodwill and Intangibles (Tables)
The identified intangible assets will be amortized on a straight-line basis over the following lives:
 
Years
Customer relationships
7
Developed technology
7
Trademark portfolio
7
The Company’s goodwill balance is as follows: 
 
Fiscal Year Ended
 
December 26, 2015
 
December 27, 2014
Beginning Balance
$
976,451

 
$
1,016,132

Change due to exchange rate fluctuations
(30,369
)
 
(39,681
)
Ending Balance
$
946,082

 
$
976,451

Financial Instruments (Tables)
The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets:
 
 
 
 
Fair Value Measurement at December 26, 2015 Using:
 
Total
 
Level 1        
 
Level 2        
 
Level 3        
Money Markets and Cash Equivalents
$
19,767,889

 
$
19,767,889

 
$

 
$

U.S. Government Securities
46,464,663

 
16,381,152

 
30,083,511

 

Corporate Debt
6,886,495

 

 
6,886,495

 

Certificates of Deposit
7,591,733

 

 
7,591,733

 

GCS Holdings
232,037

 
232,037

 

 

 
$
80,942,817

 
$
36,381,078

 
$
44,561,739

 
$

 
 
 
 
Fair Value Measurement at December 27, 2014 Using:
 
Total
 
Level 1        
 
Level 2        
 
Level 3        
Money Markets and Cash Equivalents
$
14,635,802

 
$
14,635,802

 
$

 
$

U.S. Government Securities
57,697,142

 
21,218,340

 
36,478,802

 

Corporate Debt
5,970,983

 

 
5,970,983

 

Certificates of Deposit
12,555,010

 

 
12,555,010

 

Vuzix Corporation
1,500,777

 
1,500,777

 

 

GCS Holdings
180,347

 
180,347

 

 

 
$
92,540,061

 
$
37,535,266

 
$
55,004,795

 
$

Investments in available-for-sale marketable debt securities are as follows at December 26, 2015 and December 27, 2014: 
 
 
Amortized Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
U.S. government and agency backed securities
$
46,586,224

 
$
57,897,914

 
$

 
$

 
$
(121,561
)
 
$
(200,772
)
 
$
46,464,663

 
$
57,697,142

Corporate debt and certificates of deposits
14,534,247

 
18,564,823

 

 

 
(56,019
)
 
(38,830
)
 
14,478,228

 
18,525,993

Total
$
61,120,471

 
$
76,462,737

 
$

 
$

 
$
(177,580
)
 
$
(239,602
)
 
$
60,942,891

 
$
76,223,135

The contractual maturity of the Company’s marketable debt securities is as follows at December 26, 2015:
 
 
Less than
One year
 
One to
Five years
 
Greater than
Five years
 
Total
U.S. government and agency backed securities
$
17,460,832

 
$
23,906,600

 
$
5,097,231

 
$
46,464,663

Corporate debt and certificates of deposits
12,086,055

 
2,392,173

 

 
14,478,228

Total
$
29,546,887

 
$
26,298,773

 
$
5,097,231

 
$
60,942,891

Stockholders' Equity and Stock-Based Compensation (Tables)
A summary of stock option activity under the stock award plans as of December 26, 2015 and changes during the twelve month period is as follows:
 
2015
 
Shares
 
Weighted
Average
Exercise
Price
Balance, beginning of year
130,500

 
$
3.49

Options forfeited/canceled
(125,358
)
 
3.50

Options exercised
(5,142
)
 
3.16

Balance, end of year

 
$

A summary of the activity for nonvested restricted common stock awards as of December 26, 2015 and changes during the twelve months then ended is presented below:
 
 
Shares
 
Weighted
Average
Grant
Fair Value
Balance, December 27, 2014
2,551,631

 
$
3.75

Granted
1,255,696

 
3.77

Forfeited
(388,320
)
 
3.64

Vested
(1,226,991
)
 
3.68

Balance, December 26, 2015
2,192,016

 
$
3.82

The following table summarizes stock-based compensation expense related to employee stock options and nonvested restricted common stock awards for the fiscal years 2015, 2014 and 2013 (no tax benefits were recognized):
 
 
2015
 
2014
 
2013
Cost of component revenues
$
729,715

 
$
766,221

 
$
414,842

Research and development
776,946

 
965,945

 
423,548

Selling, general and administrative
1,638,818

 
3,095,606

 
3,365,018

Total
$
3,145,479

 
$
4,827,772

 
$
4,203,408

Concentrations of Risk (Tables)
Schedules of Concentration of Risk, by Risk Factor
Ongoing credit evaluations of customers’ financial condition are performed and collateral, such as letters of credit, are generally not required. The following table depicts the customer’s trade receivable balance as a percentage of gross trade receivables as of the end of the year indicated. (The symbol “*” indicates that accounts receivables from that customer were less than 10% of the Company’s total accounts receivable.)
 
Percent of Gross
Accounts Receivable
Customer
2015
 
2014
Company A
*
 
32
Company B
21
 
14
Company C
*
 
9
Company D
15
 
*
Company E
*
 
1
Company F
*
 
5
Company G
*
 
8
Sales to significant non-affiliated customers for fiscal years 2015, 2014 and 2013, as a percentage of total revenues, is shown in the table below. Note the caption “Military Customers in Total” in the table below excludes research and development contracts. The Company sells its displays to Japanese customers through Ryoden Trading Company. (The symbol “*” indicates that sales to that customer were less than 10% of the Company’s total revenues.)
 
Sales as a Percent
of Total Revenue
 
Fiscal Year
Customer
2015
 
2014
 
2013
Military Customers in Total
32
 
45
 
38
Company A
18
 
26
 
13
Company C
22
 
11
 
*
Company E
*
 
*
 
18
Funded Research and Development Contracts
12
 
4
 
7
Income Taxes (Tables)
The (benefit) provision for income taxes from continuing operations consists of the following for the fiscal years indicated: 
 
Fiscal Year
 
2015
 
2014
 
2013
Current
 
 
 
 
 
Federal
$

 
$

 
$
(13,124,000
)
State
50,000

 
50,000

 
12,000

Foreign

 

 
(34,000
)
Total current provision (benefit)
50,000

 
50,000

 
(13,146,000
)
Deferred
 
 
 
 
 
Federal
(5,356,000
)
 
(9,554,000
)
 
(3,616,000
)
State
(62,000
)
 
(1,709,000
)
 
644,000

Foreign
188,000

 
411,000

 
(565,000
)
Change in valuation allowance
5,155,000

 
10,622,000

 
3,750,000

Total deferred (benefit) provision
(75,000
)
 
(230,000
)
 
213,000

Total (benefit) provision for income taxes
$
(25,000
)
 
$
(180,000
)
 
$
(12,933,000
)
The actual income tax (benefit) provision reported from operations are different than those which would have been computed by applying the federal statutory tax rate to loss before income tax (benefit) provision. A reconciliation of income tax (benefit) provision from continuing operations as computed at the U.S. federal statutory income tax rate to the provision for income tax benefit is as follows:
 
Fiscal Year
 
2015
 
2014
 
2013
Tax provision at federal statutory rates
$
(5,187,000
)
 
$
(9,964,000
)
 
$
(13,322,000
)
State tax liability
33,000

 
33,000

 
8,000

Foreign deferred
153,000

 
371,000

 
(644,000
)
Foreign withholding
(75,000
)
 
(196,000
)
 
308,000

Outside basis in KTC and Kowon, net
(180,000
)
 
(394,000
)
 
(202,000
)
Nondeductible expenses
(402,000
)
 
(21,000
)
 
306,000

Increase in net state operating loss carryforwards
(158,000
)
 
(177,000
)
 
(2,868,000
)
Utilization of net operating losses for U.K. research and development refund
719,000

 
1,089,000

 

Provision to tax return adjustments and state tax rate change
264,000

 
(516,000
)
 
(33,000
)
Tax credits
(501,000
)
 
(610,000
)
 
(390,000
)
Non-deductible 162M compensation limitations
40,000

 
196,000

 
558,000

Non-deductible equity compensation
(34,000
)
 
(687,000
)
 
(418,000
)
Other, net
148,000

 
74,000

 
14,000

Change in valuation allowance
5,155,000

 
10,622,000

 
3,750,000

 
$
(25,000
)
 
$
(180,000
)
 
$
(12,933,000
)
Deferred income taxes are provided to recognize the effect of temporary differences between tax and financial reporting. Deferred income tax assets and liabilities consist of the following:
 
 
Fiscal Year
 
2015
 
2014
Deferred tax liability:
 
 
 
       Foreign withholding liability
$
(1,207,000
)
 
$
(1,282,000
)
       Foreign unremitted earnings
(2,701,000
)
 
(2,882,000
)
Deferred tax assets:
 
 
 
Federal net operating loss carryforwards
28,984,000

 
22,758,000

State net operating loss carryforwards
1,913,000

 
1,689,000

Foreign net operating loss carryforwards
2,430,000

 
2,612,000

Equity awards
2,249,000

 
2,508,000

Tax credits
6,768,000

 
6,267,000

Equipment
1,113,000

 
1,024,000

Investments
3,240,000

 
5,279,000

Other
3,667,000

 
3,253,000

Net deferred tax assets
46,456,000

 
41,226,000

Valuation allowance
(47,663,000
)
 
(42,508,000
)
 
$
(1,207,000
)
 
$
(1,282,000
)
Accrued Warranty (Tables)
Accrued Warranty
Changes in the accrued warranty for fiscal years 2015 and 2014 are as follows:
 
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
Beginning Balance
$
716,000

 
$
716,000

Additions
598,000

 
798,000

Claim and reversals
(796,000
)
 
(798,000
)
Ending Balance
$
518,000

 
$
716,000

Commintments and Contingencies (Tables)
Schedule of Future Minimum Rental Payments for Operating Leases
The following is a schedule of minimum rental commitments under non-cancelable operating leases at December 26, 2015:
 
Fiscal Year ending,
Amount
2016
$
1,097,000

2017
800,000

2018
666,000

2019
639,000

2020
637,000

Thereafter
1,492,000

Total minimum lease payments
$
5,331,000

Segments and Geographical Information (Tables)
The Company has determined it has two reportable segments, FDD, the manufacturer of its reflective display products for test and simulation products, and Kopin, which is comprised of Kopin Corporation, Kowon, Kopin Software Ltd. and eMDT.
 
Kopin
 
FDD
 
Total
2015
 
 
 
 
 
Revenues
$
28,538

 
$
3,516

 
$
32,054

Net loss attributable to the controlling interest
(13,429
)
 
(1,264
)
 
(14,693
)
Total assets from continuing operations
104,677

 
1,524

 
106,201

Long-lived assets from continuing operations
2,639

 
38

 
2,677

Property and plant held for sale
819

 

 
819

2014
 
 
 
 
 
Revenues
$
28,333

 
$
3,474

 
$
31,807

Net loss attributable to the controlling interest
(26,402
)
 
(1,810
)
 
(28,212
)
Total assets from continuing operations
121,301

 
1,640

 
122,941

Long-lived assets from continuing operations
4,343

 
246

 
4,589

2013
 
 
 
 
 
Revenues
$
19,883

 
$
3,014

 
$
22,898

Net loss attributable to the controlling interest
(2,003
)
 
(2,707
)
 
(4,710
)
Total assets from continuing operations
143,953

 
2,179

 
146,132

Long-lived assets from continuing operations
5,488

 
547

 
6,035

Geographical revenue information for the three years ended December 26, 2015December 27, 2014 and December 28, 2013 was based on the location of the customers and is as follows: 
 
Fiscal Year
 
2015
 
2014
 
2013
 
Revenue
 
% of Total
 
Revenue
 
% of Total
 
Revenue
 
% of Total
US
$
21,758,000

 
68
%
 
$
19,695,000

 
62
%
 
$
11,927,000

 
53
%
Other Americas
395,000

 
1
%
 
416,000

 
1
%
 
230,000

 
1
%
Total Americas
22,153,000

 
69
%
 
20,111,000

 
63
%
 
12,157,000

 
54
%
Asia-Pacific
7,160,000

 
22
%
 
8,245,000

 
26
%
 
8,292,000

 
36
%
Europe
2,741,000

 
9
%
 
3,451,000

 
11
%
 
2,449,000

 
10
%
  Total Revenues
$
32,054,000

 
100
%
 
$
31,807,000

 
100
%
 
$
22,898,000

 
100
%
Long-lived assets by geographic area are as follows:
 
Fiscal Years
 
2015
 
2014
United States of America
$
2,613,000

 
$
2,689,000

United Kingdom
64,000

 
377,000

Republic of Korea

 
1,523,000

 
$
2,677,000

 
$
4,589,000

Selected Quarterly Financial Information (Unaudited) (Tables)
Schedule of Quarterly Financial Information
Quarterly Periods During Fiscal Year Ended December 26, 2015: 

 
Three months
ended
March 28,
2015 (3)
 
Three months
ended
June 27,
2015 (4)
 
Three months ended September 26, 2015
 
Three months
ended
December 26,
2015
 
(In thousands, except per share data)
Revenue
$
8,585

 
$
10,857

 
$
8,001

 
$
4,612

Gross profit (2)
$
1,845

 
$
3,127

 
$
1,762

 
$
(170
)
Loss from operations
$
(5,945
)
 
$
(5,495
)
 
$
(5,923
)
 
$
(7,958
)
Net (loss) gain attributable to the controlling interest
$
(3,838
)
 
$
781

 
$
(4,675
)
 
$
(6,961
)
Net (loss) gain per share from continuing operations (1):
 
 
 
 
 
 
 
Basic
$
(0.06
)
 
$
0.01

 
$
(0.07
)
 
$
(0.11
)
Diluted
$
(0.06
)
 
$
0.01

 
$
(0.07
)
 
$
(0.11
)
Shares used in computing net loss per share from continuing operations:
 
 
 
 
 
 
 
Basic
63,084

 
63,066

 
63,068

 
63,608

Diluted
63,084

 
65,030

 
63,068

 
63,608

 
(1)
Net loss per share is computed independently for each of the quarters presented; accordingly, the sum of the quarterly net income per share may not equal the total computed for the year.
(2)
Gross profit is defined as net product revenue less cost of product revenues.
(3)
Includes $2.1 million impact on net gain attributable to the controlling interest relating to the gain on sale of an investment for the three month period ended March 28, 2015.
(4)
Includes $5.5 million impact on net gain attributable to the controlling interest relating to the gain on sale of an investment for the three month period ended June 27, 2015.
 
Quarterly Periods During Fiscal Year Ended December 27, 2014:

 
Three months ended March 29, 2014
 
Three months ended June 28, 2014
 
Three months ended September 27, 2014
 
Three months
ended
December 28,
2013 (3)
 
(In thousands, except per share data)
Revenue
$
4,695

 
$
6,943

 
$
9,532

 
$
10,637

Gross profit (2)
$
2

 
$
753

 
$
3,861

 
$
2,701

(Loss) income from continuing operations
$
(9,614
)
 
$
(7,269
)
 
$
(5,520
)
 
$
(6,073
)
Net loss attributable to the controlling interest
$
(9,134
)
 
$
(8,806
)
 
$
(4,469
)
 
$
(5,302
)
Net loss per share from continuing operations (1):
 
 
 
 
 
 
 
Basic
$
(0.15
)
 
$
(0.14
)
 
$
(0.08
)
 
$
(0.08
)
Diluted
$
(0.15
)
 
$
(0.14
)
 
$
(0.08
)
 
$
(0.08
)
Shares used in computing net loss per share from continuing operations:
 
 
 
 
 
 
 
Basic
62,530

 
62,644

 
62,647

 
62,734

Diluted
62,530

 
62,644

 
62,647

 
62,734

 
(1)
Net loss per share is computed independently for each of the quarters presented; accordingly, the sum of the quarterly net income per share may not equal the total computed for the year.
(2)
Gross profit is defined as net component revenue less cost of component revenues.
(3)
Includes $1.3 million impact in loss from operations and net loss attributable to the controlling interest attributable to the write off of an investment for the three month period ended June 28, 2014, as described in Note 4.

Summary of Significant Accounting Policies (Details) (USD $)
3 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended
Dec. 26, 2015
Sep. 26, 2015
Jun. 27, 2015
Mar. 28, 2015
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Dec. 26, 2015
Minimum
Dec. 26, 2015
Maximum
Dec. 26, 2015
Restricted stock
Dec. 28, 2013
Restricted stock
display_units
Dec. 26, 2015
Restricted stock and phantom stock
Dec. 26, 2015
Kopin Software Limited
Dec. 26, 2015
Kowon Technology Corporation Limited [Member]
Dec. 27, 2014
Kowon Technology Corporation Limited [Member]
Dec. 28, 2013
Kowon Technology Corporation Limited [Member]
Dec. 26, 2015
Kopin Software Limited
Dec. 26, 2015
eMDT
Dec. 26, 2015
Unrealized Holding Gain (Loss) on Marketable Securities
Dec. 26, 2015
Cumulative Translation Adjustment
Dec. 26, 2015
Range One [Member]
Dec. 26, 2015
Range Two [Member]
Dec. 26, 2015
Range Three [Member]
Sep. 26, 2015
Range Three [Member]
Restricted stock and phantom stock
Dec. 26, 2015
Unvested Restricted Stock Awards
Dec. 27, 2014
Unvested Restricted Stock Awards
Dec. 28, 2013
Unvested Restricted Stock Awards
Dec. 26, 2015
Employee Stock Option [Member]
Dec. 27, 2014
Employee Stock Option [Member]
Dec. 28, 2013
Employee Stock Option [Member]
Dec. 27, 2014
Scenario, Adjustment [Member]
Dec. 28, 2013
Scenario, Adjustment [Member]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
$ (17,380,867)
$ (28,527,802)
$ (6,555,083)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ (0.6)
$ (0.1)
Principles of Consolidations [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finite-Lived Intangible Asset, Useful Life
 
 
 
 
 
 
 
 
 
 
 
3 years 
7 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fiscal Year Duration
 
 
 
 
 
 
 
 
52 weeks 
52 
52 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kopin's ownership percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
58.00% 
93.00% 
93.00% 
78.00% 
58.00% 
80.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Significant Shareholder Ownership Percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory, Net, Items Net of Reserve Alternative [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Raw materials
844,475 
 
 
 
 
 
 
 
844,475 
2,057,202 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Work-in-process
1,281,891 
 
 
 
 
 
 
 
1,281,891 
1,551,799 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finished goods
386,107 
 
 
 
 
 
 
 
386,107 
472,885 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory
2,512,473 
 
 
 
 
 
 
 
2,512,473 
4,081,886 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, Plant and Equipment [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Useful life of property, plant and equipment
 
 
 
 
 
 
 
 
 
 
 
3 years 
10 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets Held for Sale [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset held for sale, at Cost
2,100,000 
 
 
 
 
 
 
 
2,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Product Warranty [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Warranty reserves
500,000 
 
 
 
 
 
 
 
500,000 
700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Product warranty claims and reversals
 
 
 
 
 
 
 
 
800,000 
400,000 
800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset retirement obligation, beginning balance
 
 
 
311,187 
 
 
 
329,435 
311,187 
 
329,435 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accretion
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charges
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional liabilities incurred
 
 
 
 
 
 
 
 
(12,724)
(18,248)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset retirement obligation, ending balance
298,463 
 
 
 
 
 
 
 
298,463 
311,187 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - basic (in shares)
63,608,000 
63,068,000 
63,066,000 
63,084,000 
62,734,000 
62,647,000 
62,644,000 
62,530,000 
63,465,797 
62,638,675 
62,347,852 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock options and non-vested restricted common stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - diluted (in shares)
63,608,000 
63,068,000 
65,030,000 
63,084,000 
62,734,000 
62,647,000 
62,644,000 
62,530,000 
63,465,797 
62,638,675 
62,347,852 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Antidilutive securities excluded from computation of earnings per share
 
 
 
 
 
 
 
 
2,192,016 
2,682,131 
3,582,998 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,192,016 
2,551,631 
3,024,148 
130,500 
558,850 
 
 
Stock-based Compensation [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonvested common stock awards employment obligations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 year 
2 years 
4 years 
 
 
 
 
 
 
 
 
 
Compensation awards, number of shares of stock granted
 
 
 
 
 
 
 
 
150,000 
 
 
 
 
260,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vesting period following the grant date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Threshold closing price of common stock for vesting
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 6.0 
$ 7.0 
 
$ 5.25 
 
 
 
 
 
 
 
 
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures
 
 
 
 
 
 
 
 
300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market Condition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment of Long-term Assets [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying value of long-lived assets excluding assets held for sale
2,700,000 
 
 
 
 
 
 
 
2,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of Comprehensive Income [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax
 
 
 
 
 
 
 
 
104,362 
681,346 
(116,134)
 
 
 
 
 
 
 
 
 
 
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax
 
 
 
 
 
 
 
 
(1,500,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land Available-for-sale
800,000 
 
 
 
 
 
 
 
800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real Estate Investment Property, Net
$ 0 
 
 
 
 
 
 
 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary of Significant Accounting Policies Accumulated Other Comprehensive Income (Loss), Net of Tax (Details) (USD $)
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Beginning balance
$ 3,126,239 
$ 3,441,997 
$ 6,512,792 
Change during the year
(2,354,465)
(315,758)
(3,070,795)
Ending balance
771,774 
3,126,239 
3,441,997 
Cumulative Translation Adjustment
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Beginning balance
1,534,075 
2,524,701 
3,542,104 
Change during the year
(1,001,733)
(990,626)
(1,017,403)
Ending balance
532,342 
1,534,075 
2,524,701 
Unrealized Holding Gain (Loss) on Marketable Securities
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Beginning balance
1,592,164 
917,296 
2,970,688 
Change during the year
(1,386,415)
674,868 
(2,053,392)
Ending balance
205,749 
1,592,164 
917,296 
Acquisition of Minority Interest in KSL
 
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
Beginning balance
Change during the year
33,683 
Ending balance
$ 33,683 
$ 0 
$ 0 
Discontinued Operations (Details) (USD $)
12 Months Ended 3 Months Ended 12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Jan. 16, 2013
Mar. 30, 2013
III-V product line including all outstanding equity interest in KTC Wireless, LLC
Dec. 27, 2014
III-V product line including all outstanding equity interest in KTC Wireless, LLC
Jan. 16, 2013
III-V product line including all outstanding equity interest in KTC Wireless, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
Business Acquisition, Cost of Acquired Entity, Purchase Price
 
 
 
$ 70,200,000 
 
 
 
Proceeds received from divestiture
 
 
 
 
55,200,000 
 
 
Consideration to be paid on the third anniversary of the Closing Date
 
 
 
 
 
 
15,000,000 
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
 
 
 
 
 
 
 
Net sales and other operating revenues
 
 
 
 
 
2,300,000 
 
Income from operations before income taxes
 
 
 
 
 
(200,000)
 
Provision for income taxes on operations
 
 
 
 
 
 
Income from operations, net of tax
 
 
 
 
 
(200,000)
 
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax
 
 
 
 
 
20,400,000 
 
Income from discontinued operations, net of tax
$ 0 
$ 0 
$ 20,147,532 
 
 
$ 20,200,000 
 
Property, Plant and Equipment (Details) (USD $)
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Property, Plant and Equipment [Line Items]
 
 
 
Gross property, plant and equipment
$ 23,527,090 
$ 28,069,293 
 
Accumulated depreciation and amortization
(20,849,987)
(23,479,872)
 
Net property, plant and equipment
2,677,103 
4,589,421 
 
Depreciation expense
1,500,000 
2,600,000 
2,400,000 
Estimated sale price of land (WON)
7,600,000 
 
 
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful Life
3 years 
 
 
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful Life
10 years 
 
 
Land
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Gross property, plant and equipment
877,485 
 
Buildings
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Gross property, plant and equipment
2,298,367 
 
Buildings |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful Life
10 years 
 
 
Equipment
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Gross property, plant and equipment
18,765,548 
19,696,919 
 
Equipment |
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful Life
3 years 
 
 
Equipment |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful Life
5 years 
 
 
Leasehold improvements
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Gross property, plant and equipment
3,659,559 
3,652,395 
 
Furniture and fixtures
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Gross property, plant and equipment
789,067 
886,985 
 
Furniture and fixtures |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful Life
3 years 
 
 
Equipment under construction
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Gross property, plant and equipment
$ 312,916 
$ 657,142 
 
Other Assets and Amounts Due to / Due From Affiliates (Details) (USD $)
3 Months Ended 12 Months Ended 12 Months Ended
Mar. 28, 2015
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Jan. 16, 2013
Dec. 27, 2014
Ko Brite [Member]
Dec. 26, 2015
GCS Holdings
Dec. 27, 2014
GCS Holdings
Sep. 26, 2015
Ko Brite [Member]
Jun. 28, 2014
Ko Brite [Member]
Marketable Securities [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale Securities, Fair Value Disclosure
 
$ 60,942,891 
 
 
 
 
 
$ 200,000 
 
 
 
Available-for-sale Equity Securities, Amortized Cost Basis
 
 
 
 
 
 
 
 
 
 
Warrants and Rights Outstanding
352,000 
 
 
 
 
 
 
 
 
 
 
Prior Period Reclassification Adjustment
1,300,000 
 
171,000 
646,000 
817,000 
 
 
 
 
 
 
Operating Income (Loss)
 
25,321,400 
28,474,725 
35,927,691 
 
 
6,114,000 
 
 
 
 
Non-Marketable Securities-Equity Method Investment [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Non-Marketable Securities - Equity Method Investments
 
 
 
 
 
 
 
 
 
 
1,300,000 
Equity Method Investment, Ownership Percentage
 
 
 
 
 
 
 
 
 
12.00% 
 
Equity Method Investment, Other than Temporary Impairment
 
 
 
3,000,000 
 
 
 
 
 
 
 
Other than Temporary Impairment Losses, Investments
 
2,500,000 
 
 
 
 
 
 
 
 
 
Notes, Loans and Financing Receivable, Gross, Noncurrent
 
 
 
 
 
15,000,000 
 
 
 
 
 
Due from Employees, Current
 
$ 140,000 
 
 
 
 
 
 
 
 
 
Other Assets and Amounts Due to / Due From Affiliates (Non-Marketable Securities - Equity Method Investments) (Details) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 26, 2015
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Sep. 26, 2015
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Equity losses in unconsolidated affiliates
 
 
 
 
 
 
 
 
$ (47,443)
$ (386,442)
$ (625,098)
Summarized Financial Information
 
 
 
 
 
 
 
 
 
 
 
Current assets
101,156,222 
 
 
 
 
 
 
 
101,156,222 
99,924,620 
 
Current liabilities
11,276,844 
 
 
 
 
 
 
 
11,276,844 
13,242,924 
 
Revenues
4,612,000 
10,857,000 
8,585,000 
10,637,000 
9,532,000 
6,943,000 
4,695,000 
8,001,000 
32,054,000 
31,807,465 
22,897,709 
Operating Income (Loss)
 
 
 
 
 
 
 
 
(25,321,400)
(28,474,725)
(35,927,691)
Net loss
 
 
 
 
 
 
 
 
(14,843,067)
(28,670,789)
(5,606,016)
Ko Brite [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Equity losses in unconsolidated affiliates
 
 
 
 
 
 
 
 
(102,305)
(406,811)
Summarized Financial Information
 
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
7,769,000 
 
Noncurrent assets
 
 
 
 
 
 
 
 
 
10,663,000 
 
Current liabilities
 
 
 
 
 
 
 
 
 
1,207,000 
 
Revenues
 
 
 
 
 
 
 
 
 
5,085,000 
 
Margin loss
 
 
 
 
 
 
 
 
 
(2,501,000)
 
Operating Income (Loss)
 
 
 
 
 
 
 
 
 
(6,114,000)
 
Net loss
 
 
 
 
 
 
 
 
 
(5,526,000)
 
Ask Ziggy
 
 
 
 
 
 
 
 
 
 
 
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Equity losses in unconsolidated affiliates
 
 
 
 
 
 
 
 
$ (47,443)
$ (284,137)
$ (218,287)
Business Combinations (Details) (USD $)
12 Months Ended 1 Months Ended 12 Months Ended 12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Dec. 29, 2012
Apr. 30, 2013
eMDT
Apr. 17, 2013
eMDT
Dec. 28, 2013
Kowon Technology Corporation Limited [Member]
Mar. 14, 2013
Kowon Technology Corporation Limited [Member]
Dec. 26, 2015
Kopin Software Limited [Member]
Dec. 26, 2015
Kowon Technology Corporation Limited [Member]
Dec. 27, 2014
Kowon Technology Corporation Limited [Member]
Dec. 28, 2013
Kowon Technology Corporation Limited [Member]
Dec. 26, 2015
eMDT
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Kopin's ownership percentage
 
 
 
 
 
 
 
 
58.00% 
93.00% 
93.00% 
78.00% 
80.00% 
Significant Shareholder Ownership Percentage
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions
 
 
 
 
 
 
 
 
17.50% 
 
 
 
 
Business Combination, Consideration Transferred
$ 1 
$ 300,000 
 
 
$ 400,000 
 
$ 3,700,000 
 
 
 
 
 
 
Cumulative percentage of voting interests acquired
 
 
 
 
51.00% 
 
 
 
 
 
 
 
 
Payments to Acquire Investments
3,583,611 
 
200,000 
 
 
 
 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
946,082 
976,451 
 
1,016,132 
 
400,000 
 
 
 
 
 
 
 
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Changes, Additional Interest Issued to Parent
$ 0.29 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Percentage of Voting Interests Acquired
 
 
 
 
 
 
 
15.00% 
 
 
 
 
 
Goodwill and Intangibles (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 28, 2013
Dec. 26, 2015
Dec. 27, 2014
Dec. 29, 2012
Goodwill [Roll Forward]
 
 
 
 
Beginning Balance
 
$ 976,451 
 
$ 1,016,132 
Disposals
 
(30,369)
(39,681)
 
Ending Balance
 
946,082 
976,451 
1,016,132 
Amortization of intangible assets due in next twelve months
300,000 
600,000 
1,000,000 
 
Customer relationships
 
 
 
 
Goodwill [Roll Forward]
 
 
 
 
Useful life of identifiable intangible assets
 
7 years 
 
 
Developed technology
 
 
 
 
Goodwill [Roll Forward]
 
 
 
 
Useful life of identifiable intangible assets
 
7 years 
 
 
Trademark portfolio
 
 
 
 
Goodwill [Roll Forward]
 
 
 
 
Useful life of identifiable intangible assets
 
7 years 
 
 
FDD
 
 
 
 
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items]
 
 
 
 
Impairment of Intangible Assets (Excluding Goodwill)
$ 1,200,000 
 
 
 
Financial Instruments (Fair Value Measurements) (Details) (USD $)
Dec. 26, 2015
Dec. 27, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
$ 80,942,817 
$ 92,540,061 
Money Markets and Cash Equivalents
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
19,767,889 
14,635,802 
U.S. Government Securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
46,464,663 
57,697,142 
Corporate Debt
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
6,886,495 
5,970,983 
Certificates of Deposit
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
7,591,733 
12,555,010 
Vuzix
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
 
1,500,777 
GCS Holdings
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
232,037 
180,347 
Level 1
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
36,381,078 
37,535,266 
Level 1 |
Money Markets and Cash Equivalents
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
19,767,889 
14,635,802 
Level 1 |
U.S. Government Securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
16,381,152 
21,218,340 
Level 1 |
Vuzix
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
 
1,500,777 
Level 1 |
GCS Holdings
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
232,037 
180,347 
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
44,561,739 
55,004,795 
Level 2 |
U.S. Government Securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
30,083,511 
36,478,802 
Level 2 |
Corporate Debt
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
6,886,495 
5,970,983 
Level 2 |
Certificates of Deposit
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
7,591,733 
12,555,010 
Level 2 |
Vuzix
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
 
Level 2 |
GCS Holdings
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
Level 3 |
Money Markets and Cash Equivalents
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
Level 3 |
U.S. Government Securities
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
Level 3 |
Corporate Debt
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
Level 3 |
Certificates of Deposit
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
Level 3 |
Vuzix
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
 
Level 3 |
GCS Holdings
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measurements of financial assets
$ 0 
$ 0 
Financial Instruments (Marketable Debt Securities) (Details) (USD $)
Dec. 26, 2015
Dec. 27, 2014
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
$ 61,120,471 
$ 76,462,737 
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax
177,580 
239,602 
Available-for-sale Securities, Debt Securities
60,942,891 
76,223,135 
Less than One year
29,546,887 
 
One to Five years
26,298,773 
 
Greater than Five years
5,097,231 
 
Fair Value
60,942,891 
 
U.S. government and agency backed securities
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
46,586,224 
57,897,914 
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax
121,561 
(200,772)
Available-for-sale Securities, Debt Securities
46,464,663 
 
Less than One year
17,460,832 
 
One to Five years
23,906,600 
 
Greater than Five years
5,097,231 
 
Fair Value
46,464,663 
57,697,142 
Corporate Debt Securities And Certificates Of Deposit [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
14,534,247 
18,564,823 
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax
56,019 
38,830 
Available-for-sale Securities, Debt Securities
14,478,228 
18,525,993 
Less than One year
12,086,055 
 
One to Five years
2,392,173 
 
Greater than Five years
 
Fair Value
$ 14,478,228 
 
Stockholders' Equity and Stock-Based Compensation (Details) (USD $)
6 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Jun. 28, 2014
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Dec. 26, 2009
Jun. 30, 2010
Dec. 26, 2015
Unvested Restricted Stock Awards
Dec. 27, 2014
Unvested Restricted Stock Awards
Dec. 26, 2015
Restricted stock
Dec. 31, 2001
Supplemental Equity Plan 2001 [Member]
Dec. 31, 2001
Equity Incentive Plan 2001
Dec. 26, 2015
Equity Incentive Plan 2001
Dec. 26, 2015
2010 Equity Plan
Dec. 26, 2015
2010 Equity Plan
Employee Stock Option [Member]
Dec. 26, 2015
2010 Equity Plan
Employee Stock Option [Member]
Minimum
Dec. 26, 2015
Period 1
Unvested Restricted Stock Awards
Dec. 26, 2015
Period 2
Unvested Restricted Stock Awards
Dec. 26, 2015
Period 3
Unvested Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares authorized
 
 
 
 
 
 
 
 
 
 
7,100,000 
 
 
 
 
 
 
 
Life of award
 
 
 
 
 
 
 
 
 
10 years 
10 years 
 
 
10 years 
 
 
 
 
Number of shares that may be issued
 
 
 
 
 
 
 
 
 
 
2,200,000 
 
 
 
 
 
Purchase price of common stock under equity plans as percent of fair value at the grant date
 
 
 
 
 
 
 
 
 
 
 
 
 
110.00% 
100.00% 
 
 
 
Number of shares repurchased since inception
 
2,241,121 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Value of shares repurchased since inception
 
 
$ 8,290,573 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value
 
26,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class of Warrant or Right, Number of Securities Called by Warrants or Rights
 
 
 
 
 
200,000 
 
 
 
 
 
 
 
 
 
 
 
 
Class of Warrant or Right, Exercise Price of Warrants or Rights
 
$ 3.49 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from exercise of stock options and warrants
 
86,047 
137,813 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee Service Share-based Compensation, Tax Benefit Realized from Exercise of Stock Options
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 year 
2 years 
4 years 
Error Corrections and Prior Period Adjustments, Description
 
 
4.41 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value
 
 
 
 
 
 
$ 3.82 
$ 3.75 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period
50,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation
222,000 
3,145,479 
4,827,772 
4,203,408 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized
 
 
 
 
 
 
 
 
$ 4,400,000 
 
 
 
 
 
 
 
 
 
Stockholders' Equity and Stock-Based Compensation (Stock Options) (Details) (USD $)
12 Months Ended
Dec. 26, 2015
Shares
 
Beginning Balance
130,500 
Options forfeited/cancelled
(125,358)
Options exercised
5,142 
Ending Balance
Weighted Average Exercise Price
 
Beginning Balance
$ 3.49 
Options forfeited/cancelled
$ 3.50 
Options exercised
$ 3.16 
Ending Balance
$ 0.00 
Stockholders' Equity and Stock-Based Compensation (Nonvested Restricted Common Stock) (Details) (USD $)
12 Months Ended
Dec. 26, 2015
Shares
 
Granted
150,000 
Non-vested restricted common stock
 
Shares
 
Beginning Balance
2,551,631 
Granted
1,255,696 
Forfeited
(388,320)
Vested
(1,226,991)
Ending Balance
2,192,016 
Weighted Average Grant Fair Value
 
Beginning Balance
$ 3.75 
Granted
$ 3.77 
Forfeited
$ 3.64 
Vested
$ 3.68 
Ending Balance
$ 3.82 
Restricted stock
 
Shares
 
Granted
260,000 
Stockholders' Equity and Stock-Based Compensation (Stock-Based Compensation) (Details) (USD $)
6 Months Ended 12 Months Ended
Jun. 28, 2014
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation
$ 222,000 
$ 3,145,479 
$ 4,827,772 
$ 4,203,408 
Cost of component revenues
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation
 
729,715 
766,221 
414,842 
Research and development
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation
 
776,946 
965,945 
423,548 
Selling, general and administrative
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation
 
$ 1,638,818 
$ 3,095,606 
$ 3,365,018 
Concentrations of Risk (Details)
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Percent of Gross Accounts Receivable |
Credit concentration risk |
Company A
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentrations of risk, percentage
 
32.00% 
 
Percent of Gross Accounts Receivable |
Credit concentration risk |
Company B
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentrations of risk, percentage
21.00% 
14.00% 
 
Percent of Gross Accounts Receivable |
Credit concentration risk |
Company C [Member]
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentrations of risk, percentage
 
9.00% 
 
Percent of Gross Accounts Receivable |
Credit concentration risk |
Company D
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentrations of risk, percentage
15.00% 
 
 
Percent of Gross Accounts Receivable |
Credit concentration risk |
Company E [Member]
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentrations of risk, percentage
 
1.00% 
 
Percent of Gross Accounts Receivable |
Credit concentration risk |
Company F [Member]
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentrations of risk, percentage
 
5.00% 
 
Percent of Gross Accounts Receivable |
Credit concentration risk |
Company G [Member] [Domain]
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentrations of risk, percentage
 
8.00% 
 
Sales as a Percent of Total Revenue |
Customer concentration risk |
Company A
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentrations of risk, percentage
18.00% 
26.00% 
13.00% 
Sales as a Percent of Total Revenue |
Customer concentration risk |
Military Customers in Total
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentrations of risk, percentage
32.00% 
45.00% 
38.00% 
Sales as a Percent of Total Revenue |
Customer concentration risk |
Company C [Member]
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentrations of risk, percentage
22.00% 
11.00% 
 
Sales as a Percent of Total Revenue |
Customer concentration risk |
Company E [Member]
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentrations of risk, percentage
 
 
18.00% 
Sales as a Percent of Total Revenue |
United States Government Funded Research and Development Contracts
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentrations of risk, percentage
12.00% 
4.00% 
7.00% 
Income Taxes (Details) (USD $)
3 Months Ended 12 Months Ended
Mar. 14, 2013
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Current:
 
 
 
 
Federal
 
$ 0 
$ 0 
$ (13,124,000)
State
 
50,000 
50,000 
12,000 
Foreign
1,200,000 
(34,000)
Other Tax Expense (Benefit)
 
50,000 
50,000 
(13,146,000)
Total current provision
 
(25,000)
(180,000)
(12,933,209)
Deferred:
 
 
 
 
Federal
 
(5,356,000)
(9,554,000)
(3,616,000)
State
 
(62,000)
(1,709,000)
644,000 
Foreign
 
188,000 
411,000 
(565,000)
Change in valuation allowance
 
5,155,000 
10,622,000 
3,750,000 
Total deferred provision
 
(75,000)
(230,000)
213,000 
Total (benefit) provision for income taxes
 
(25,000)
(180,000)
(12,933,000)
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract]
 
 
 
 
Tax provision at federal statutory rates
 
(5,187,000)
(9,964,000)
(13,322,000)
State tax liability
 
33,000 
33,000 
8,000 
Foreign deferred
 
153,000 
371,000 
(644,000)
Foreign withholding
 
(75,000)
(196,000)
308,000 
Outside basis in KTC and Kowon, net
 
(180,000)
(394,000)
(202,000)
Goodwill
 
Non-deductible expenses
 
(402,000)
(21,000)
306,000 
Increase in net state operating loss carryforwards
 
(158,000)
(177,000)
(2,868,000)
Utilization of NOL for R&D refund
 
719,000 
1,089,000 
Provision to tax return adjustments and state tax rate change
 
264,000 
(516,000)
(33,000)
Tax credits
 
(501,000)
(610,000)
(390,000)
Effective Income Tax Rate Reconciliation, Deduction, Amount
 
40,000 
196,000 
558,000 
Non-deductible equity compensation
 
(34,000)
(687,000)
(418,000)
Other, net
 
148,000 
74,000 
14,000 
Change in valuation allowance
 
5,155,000 
10,622,000 
3,750,000 
Total (benefit) provision for income taxes
 
(25,000)
(180,000)
(12,933,000)
Deferred tax liability:
 
 
 
 
Intangible asset
 
 
Foreign withholding liability
 
(1,207,000)
(1,282,000)
 
Foreign unremitted earnings
 
(2,701,000)
(2,882,000)
 
Deferred Tax assets:
 
 
 
 
Federal net operating loss carryforwards
 
28,984,000 
22,758,000 
 
State net operating loss carryforwards
 
1,913,000 
1,689,000 
 
Foreign net operating loss carryforwards
 
2,430,000 
2,612,000 
 
Equity awards
 
2,249,000 
2,508,000 
 
Tax credits
 
6,768,000 
6,267,000 
 
Equipment
 
1,113,000 
1,024,000 
 
Investments
 
3,240,000 
5,279,000 
 
Other
 
3,667,000 
3,253,000 
 
Net deferred tax assets
 
46,456,000 
41,226,000 
 
Valuation allowance
 
(47,663,000)
(42,508,000)
 
Net deferred tax assets after deducting valuation allowance
 
(1,207,000)
(1,282,000)
 
Pretax foreign (losses) earnings
 
(968,000)
(2,588,000)
(4,966,000)
Total (benefit) provision for income taxes
 
(25,000)
(180,000)
(12,933,000)
Increase (decrease) in valuation allowance
 
5,200,000 
 
 
Unrecorded benefits from stock award
 
10,300,000 
 
 
Deferred Tax Liabilities, Parent's Basis in Discontinued Operation
 
2,700,000 
 
 
Maximum
 
 
 
 
Deferred Tax assets:
 
 
 
 
The state impact of any federal changes, subject to examination by various states (in years)
 
1 year 
 
 
Segments excluding KTC
 
 
 
 
Deferred Tax assets:
 
 
 
 
Increase (decrease) in valuation allowance
 
 
10,600,000 
 
Utiilzation of operating loss carryforwards
 
 
21,400,000 
 
International jurisdictions |
Minimum
 
 
 
 
Deferred Tax assets:
 
 
 
 
Income tax returns examination period
 
3 years 
 
 
International jurisdictions |
Maximum
 
 
 
 
Deferred Tax assets:
 
 
 
 
Income tax returns examination period
 
7 years 
 
 
Federal
 
 
 
 
Deferred Tax assets:
 
 
 
 
Net operating loss carryforwards available for tax purposes
 
$ 82,800,000 
 
 
State |
Minimum
 
 
 
 
Deferred Tax assets:
 
 
 
 
Income tax returns examination period
 
3 years 
 
 
State |
Maximum
 
 
 
 
Deferred Tax assets:
 
 
 
 
Income tax returns examination period
 
5 years 
 
 
Accrued Warranty (Details) (USD $)
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Product Warranties Disclosures [Abstract]
 
 
Product warranty term
12 months 
 
Movement in Standard Product Warranty Accrual [Roll Forward]
 
 
Beginning Balance
$ 716,000 
$ 716,000 
Additions
598,000 
798,000 
Claims and reversals
(796,000)
(798,000)
Ending Balance
$ 518,000 
$ 716,000 
Employee Benefit Plan (Details) (USD $)
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Schedule of Benefit Plans Disclosure [Line Items]
 
 
 
Employee age threshhold for higher annual contribution
50 years 
 
 
Employer matching percentage
50.00% 
 
 
Maximum amount of employee contribution that employer matches
6.00% 
 
 
Amount charged to operations in connection with the plan
$ 324,000 
$ 224,000 
$ 146,000 
Under the age of 50
 
 
 
Schedule of Benefit Plans Disclosure [Line Items]
 
 
 
Maximum amount of annual compensation that can be deferred
18,000 
 
 
Over the age fo 50
 
 
 
Schedule of Benefit Plans Disclosure [Line Items]
 
 
 
Maximum amount of annual compensation that can be deferred
$ 24,000 
 
 
Commintments and Contingencies (Details) (USD $)
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
 
 
2016
$ 1,097,000 
 
 
2017
800,000 
 
 
2018
666,000 
 
 
2019
639,000 
 
 
2020
637,000 
 
 
Thereafter
1,492,000 
 
 
Total minimum lease payments
5,331,000 
 
 
Rent expense
1,700,000 
1,700,000 
1,300,000 
Royalty expense
$ 22,000 
$ 37,000 
$ 20,000 
Commintments and Contingencies new purchase agreement (Details) (Shenzhen DLODLO Technologies Co Ltd. [Member], USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Shenzhen DLODLO Technologies Co Ltd. [Member]
 
Other Commitments [Line Items]
 
Business Acquisition, Percentage of Voting Interests Acquired
2.00% 
Payments to Acquire Businesses and Interest in Affiliates
$ 2.5 
Segments and Geographical Information (Details) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Dec. 26, 2015
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Sep. 26, 2015
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Dec. 26, 2015
Continuing Operations
Dec. 27, 2014
Continuing Operations
Dec. 28, 2013
Continuing Operations
Dec. 29, 2012
Continuing Operations
Dec. 26, 2015
Kopin U.S.
Dec. 27, 2014
Kopin U.S.
Dec. 28, 2013
Kopin U.S.
Dec. 26, 2015
Kopin U.S.
Continuing Operations
Dec. 27, 2014
Kopin U.S.
Continuing Operations
Dec. 28, 2013
Kopin U.S.
Continuing Operations
Dec. 29, 2012
Kopin U.S.
Continuing Operations
Dec. 26, 2015
FDD
Dec. 27, 2014
FDD
Dec. 28, 2013
FDD
Dec. 26, 2015
FDD
Continuing Operations
Dec. 27, 2014
FDD
Continuing Operations
Dec. 28, 2013
FDD
Continuing Operations
Dec. 29, 2012
FDD
Continuing Operations
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$ 4,612,000 
$ 10,857,000 
$ 8,585,000 
$ 10,637,000 
$ 9,532,000 
$ 6,943,000 
$ 4,695,000 
$ 8,001,000 
$ 32,054,000 
$ 31,807,465 
$ 22,897,709 
 
 
 
 
$ 28,538,000 
$ 28,333,000 
$ 19,883,000 
 
 
 
 
$ 3,516,000 
$ 3,474,000 
$ 3,014,000 
 
 
 
 
Net income (loss) income attributable to the controlling interest
(6,961,000)
781,000 
(3,838,000)
(5,302,000)
(4,469,000)
(8,806,000)
(9,134,000)
(4,675,000)
(14,693,416)
(28,212,044)
(4,709,616)
(14,693,000)
(28,212,000)
(4,710,000)
 
 
 
 
(13,429,000)
(26,402,000)
(2,003,000)
 
 
 
 
(1,264,000)
(1,810,000)
(2,707,000)
 
Total assets from continuing operations
106,060,086 
 
 
 
 
 
 
 
106,060,086 
122,941,414 
 
106,201,000 
122,941,000 
 
146,132,000 
 
 
 
104,677,000 
121,301,000 
 
143,953,000 
 
 
 
1,524,000 
1,640,000 
 
2,179,000 
Long lived assets
2,677,000 
 
 
 
 
 
 
 
2,677,000 
4,589,000 
 
2,677,000 
4,589,000 
 
6,035,000 
 
 
 
2,639,000 
4,343,000 
 
5,488,000 
 
 
 
38,000 
246,000 
 
547,000 
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment, Noncurrent
 
 
 
 
 
 
 
 
 
 
 
$ 819 
 
 
 
 
 
 
$ 819 
 
 
 
 
 
 
$ 0 
 
 
 
Segments and Geographical Information (Percentage of Net Revenues by Geographies) (Details) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 26, 2015
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Sep. 26, 2015
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenues
$ 4,612,000 
$ 10,857,000 
$ 8,585,000 
$ 10,637,000 
$ 9,532,000 
$ 6,943,000 
$ 4,695,000 
$ 8,001,000 
$ 32,054,000 
$ 31,807,465 
$ 22,897,709 
Percent of Total
 
 
 
 
 
 
 
 
100.00% 
100.00% 
100.00% 
Long lived assets
2,677,000 
 
 
 
 
 
 
 
2,677,000 
4,589,000 
 
United States of America
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
21,758,000 
19,695,000 
11,927,000 
Percent of Total
 
 
 
 
 
 
 
 
68.00% 
62.00% 
53.00% 
Long lived assets
2,613,000 
 
 
 
 
 
 
 
2,613,000 
2,689,000 
 
Others
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
395,000 
416,000 
230,000 
Percent of Total
 
 
 
 
 
 
 
 
1.00% 
1.00% 
1.00% 
Americas
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
22,153,000 
20,111,000 
12,157,000 
Percent of Total
 
 
 
 
 
 
 
 
69.00% 
63.00% 
54.00% 
Asia-Pacific
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
7,160,000 
8,245,000 
8,292,000 
Percent of Total
 
 
 
 
 
 
 
 
22.00% 
26.00% 
36.00% 
Europe
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
2,741,000 
3,451,000 
2,449,000 
Percent of Total
 
 
 
 
 
 
 
 
9.00% 
11.00% 
10.00% 
United Kingdom
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Long lived assets
64,000 
 
 
 
 
 
 
 
64,000 
377,000 
 
Republic of Korea
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Long lived assets
$ 0 
 
 
 
 
 
 
 
$ 0 
$ 1,523,000 
 
Selected Quarterly Financial Information (Unaudited) (Details) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended
Dec. 26, 2015
Sep. 26, 2015
Jun. 27, 2015
Mar. 28, 2015
Jun. 28, 2014
Mar. 29, 2014
Dec. 28, 2013
Sep. 28, 2013
Jun. 29, 2013
Mar. 30, 2013
Sep. 26, 2015
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Effect of Fourth Quarter Events [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$ 4,612,000 
 
 
 
$ 10,857,000 
$ 8,585,000 
$ 10,637,000 
$ 9,532,000 
$ 6,943,000 
$ 4,695,000 
$ 8,001,000 
$ 32,054,000 
$ 31,807,465 
$ 22,897,709 
Gross profit
(170,000)1
 
 
 
3,127,000 1
1,845,000 1
2,701,000 1
3,861,000 1
753,000 1
2,000 1
1,762,000 1
 
 
 
(Loss) income from continuing operations
(7,958,000)
 
 
 
(5,495,000)
(5,945,000)
(6,073,000)
(5,520,000)
(7,269,000)
(9,614,000)
(5,923,000)
(14,843,067)
(28,670,789)
(25,753,548)
Net income (loss) attributable to the controlling interest
(6,961,000)
 
 
 
781,000 
(3,838,000)
(5,302,000)
(4,469,000)
(8,806,000)
(9,134,000)
(4,675,000)
(14,693,416)
(28,212,044)
(4,709,616)
Net (loss) income per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
$ (0.11)2
 
 
 
$ 0.01 2
$ (0.06)2
$ (0.08)2
$ (0.08)2
$ (0.14)2
$ (0.15)2
$ (0.07)2
$ (0.23)
$ (0.45)
$ (0.08)
Diluted (in dollars per share)
$ (0.11)2
 
 
 
$ 0.01 2
$ (0.06)2
$ (0.08)2
$ (0.08)2
$ (0.14)2
$ (0.15)2
$ (0.07)2
$ (0.23)
$ (0.45)
$ (0.08)
Shares used in computing net income per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic (in shares)
63,608,000 
63,068,000 
63,066,000 
63,084,000 
 
 
62,734,000 
62,647,000 
62,644,000 
62,530,000 
 
63,465,797 
62,638,675 
62,347,852 
Diluted (in shares)
63,608,000 
63,068,000 
65,030,000 
63,084,000 
 
 
62,734,000 
62,647,000 
62,644,000 
62,530,000 
 
63,465,797 
62,638,675 
62,347,852 
Gain on sales of investments
 
 
5,500,000 
2,100,000 
 
 
 
 
 
 
 
9,206,919 
1,899,291 
Scenario, Adjustment [Member]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares used in computing net income per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Asset Impairment Charges
 
 
 
 
 
 
$ 1,300,000 
 
 
 
 
 
 
 
Schedule II - Valuation and Qualifying Accounts (Details) (Reserve deducted from assets - allowance for doubtful accounts, USD $)
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Reserve deducted from assets - allowance for doubtful accounts
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Balance at Beginning of Year
$ 266,000 
$ 202,000 
$ 311,000 
Additions Charged to Income
81,000 
19,000 
Deductions from Reserve
(113,000)
(17,000)
(128,000)
Balance at End of Year
$ 153,000 
$ 266,000 
$ 202,000