KOPIN CORP, 10-Q filed on 8/8/2013
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 29, 2013
Aug. 2, 2013
Document Documentand Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Jun. 29, 2013 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q1 
 
Trading Symbol
KOPN 
 
Entity Registrant Name
KOPIN CORP 
 
Entity Central Index Key
0000771266 
 
Current Fiscal Year End Date
--12-29 
 
Entity Filer Category
Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
67,435,125 
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
Jun. 29, 2013
Dec. 29, 2012
Current assets:
 
 
Cash and equivalents
$ 32,799,552 
$ 27,135,387 
Marketable debt securities, at fair value
97,584,160 
65,349,962 
Accounts receivable, net of allowance of $454,000 and $513,000 in 2012 and 2011, respectively
2,697,482 
5,254,549 
Accounts receivable from unconsolidated affiliates
0 
84,780 
Unbilled receivables
112,352 
178,036 
Inventory
3,668,934 
5,789,753 
Prepaid taxes
268,832 
683,032 
Prepaid expenses and other current assets
1,146,153 
917,841 
Assets of Disposal Group, Including Discontinued Operation, Current
0 
21,573,729 
Total current assets
138,277,465 
126,967,069 
Property, plant and equipment, net
6,429,706 
8,486,406 
Goodwill
1,080,502 
684,789 
Intangible assets, net
3,528,093 
2,316,924 
Other assets
21,102,843 
8,607,882 
Assets of Disposal Group, Including Discontinued Operation, Noncurrent
0 
29,145,732 
Total assets
170,418,609 
176,208,802 
Current liabilities:
 
 
Accounts payable
3,143,715 
5,121,324 
Accrued payroll and expenses
1,707,275 
2,147,512 
Accrued warranty
716,000 
716,000 
Billings in excess of revenue earned
1,930,850 
1,220,395 
Other accrued liabilities
3,301,947 
2,563,797 
Deferred Tax Liabilities, Net, Current
1,556,592 
1,304,513 
Liabilities of Disposal Group, Including Discontinued Operation, Current
0 
7,102,895 
Total current liabilities
12,356,379 
20,176,436 
Asset retirement obligations
304,785 
322,477 
Liabilities of Disposal Group, Including Discontinued Operation, Noncurrent
0 
623,979 
Commitments and contingencies
   
   
Stockholders' equity:
 
 
Preferred stock, par value $.01 per share: authorized, 3,000 shares; none issued
0 
0 
Common stock, par value $.01 per share: authorized, 120,000,000 shares; issued 76,156,551 shares in 2012 and 76,123,940 shares in 2011; outstanding 63,414,292 shares in 2012 and 64,361,491 shares in 2011
739,041 
736,966 
Additional paid-in capital
320,105,369 
318,928,495 
Treasury stock (9,861,139 and 8,864,767 shares in 2012 and 2011, respectively, at cost)
(36,681,821)
(34,450,978)
Accumulated other comprehensive income
2,541,654 
6,512,792 
Accumulated deficit
(129,269,632)
(142,993,595)
Total Kopin Corporation stockholders' equity
157,434,611 
148,733,680 
Noncontrolling interest
322,834 
6,352,230 
Total stockholders' equity
157,757,445 
155,085,910 
Total liabilities and stockholders' equity
$ 170,418,609 
$ 176,208,802 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Jun. 29, 2013
Dec. 29, 2012
Statement of Financial Position [Abstract]
 
 
Accounts receivable, allowance
$ 251,000 
$ 311,000 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, authorized
3,000 
3,000 
Preferred stock, issued
0 
0 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, authorized
120,000,000 
120,000,000 
Common stock, issued
77,921,263 
75,979,695 
Common stock, outstanding
63,418,006 
63,835,508 
Treasury stock, shares
10,486,138 
9,861,139 
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (USD $)
3 Months Ended 6 Months Ended
Jun. 29, 2013
Jun. 30, 2012
Jun. 29, 2013
Jun. 30, 2012
Revenues:
 
 
 
 
Net product revenues
$ 5,608,778 
$ 6,087,547 
$ 11,176,802 
$ 16,490,773 
Research and development revenues
469,867 
924,031 
1,220,928 
1,386,835 
Total revenues
6,078,645 
7,011,578 
12,397,730 
17,877,608 
Expenses:
 
 
 
 
Cost of product revenues
6,203,960 
4,960,588 
12,168,366 
12,109,096 
Research and development
3,657,952 
2,927,695 
7,905,508 
5,929,910 
Selling, general and administration
4,852,533 
4,118,056 
10,601,649 
8,327,685 
Impairment of goodwill
0 
1,704,770 
0 
1,704,770 
Total expenses
14,714,445 
13,711,109 
30,675,523 
28,071,461 
(Loss) income from operations
(8,635,800)
(6,699,531)
(18,277,793)
(10,193,853)
Other income and expense:
 
 
 
 
Interest income
285,227 
290,253 
595,664 
522,569 
Other income net
195,073 
38,625 
17,904 
97,834 
Foreign currency transaction (losses) gains
371,215 
65,305 
591,923 
(47,259)
Gain on sale of investments
0 
0 
0 
856,170 
Asset Impairment Charges
0 
0 
(2,485,393)
0 
Total other income and expense
851,515 
394,183 
(1,279,902)
1,429,314 
(Loss) income before provision for income taxes, equity losses in unconsolidated affiliates and net loss (income) attributable to noncontrolling interest
(7,784,285)
(6,305,348)
(19,557,695)
(8,764,539)
Tax provision
(194,000)
85,500 
12,846,000 
(12,800)
(Loss) income before equity loss in unconsolidated affiliates and net (loss) income of noncontrolling interest
(7,978,285)
(6,219,848)
(6,711,695)
(8,777,339)
Equity losses in unconsolidated affiliates
(83,697)
(233,907)
(182,785)
(390,202)
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest
(8,061,982)
(6,453,755)
(6,894,480)
(9,167,541)
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest
(49,356)
1,328,961 
20,147,532 
1,574,661 
Net (loss) income
(8,111,338)
(5,124,794)
13,253,052 
(7,592,880)
Net loss (income) attributable to the noncontrolling interest
201,492 
(72,738)
470,911 
(183,975)
Net (loss) income attributable to the controlling interest
$ (7,909,846)
$ (5,197,532)
$ 13,723,963 
$ (7,776,855)
Net (loss) income per share
 
 
 
 
Income (Loss) from Continuing Operations, Per Basic Share
$ (0.13)
$ (0.10)
$ (0.10)
$ (0.15)
Income (Loss) from Discontinued Operations, Net of Tax, Per Basic Share
$ 0.00 
$ 0.02 
$ 0.32 
$ 0.02 
Basic
$ (0.13)
$ (0.08)
$ 0.22 
$ (0.13)
Income (Loss) from Continuing Operations, Per Diluted Share
$ (0.13)
$ (0.10)
$ (0.10)
$ (0.15)
Income (Loss) from Discontinued Operations, Net of Tax, Per Diluted Share
$ 0.00 
$ 0.02 
$ 0.32 
$ 0.02 
Diluted
$ (0.13)
$ (0.08)
$ 0.22 
$ (0.13)
Weighted average number of common shares
 
 
 
 
Basic
62,492,352 
63,078,510 
62,160,046 
63,651,983 
Diluted
62,492,352 
63,078,510 
63,442,466 
63,651,983 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $)
3 Months Ended 6 Months Ended
Jun. 29, 2013
Jun. 30, 2012
Jun. 29, 2013
Jun. 30, 2012
Statement of Other Comprehensive Income [Abstract]
 
 
 
 
Net (loss) income
$ (8,111,338)
$ (5,124,794)
$ 13,253,052 
$ (7,592,880)
Foreign currency translation adjustments
(627,789)
(829,709)
(1,238,372)
223,845 
Holding (loss) gain on marketable securities
(1,767,500)
(208,712)
(1,566,306)
1,370,669 
Reclassifications of gains in net (loss) income
(25,910)
(48,700)
(29,193)
(544,359)
Other Comprehensive Income (Loss), Net of Tax
(2,421,199)
(1,087,121)
(2,833,871)
1,050,155 
Comprehensive (loss) income
(10,532,537)
(6,211,915)
10,419,181 
(6,542,725)
Comprehensive loss (income) attributable to the noncontrolling interest
241,793 
50,125 
558,973 
(201,297)
Comprehensive (loss) income attributable to controlling interest
$ (10,290,744)
$ (6,161,790)
$ 10,978,154 
$ (6,744,022)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)
Total
Common Stock
Additional Paid-in Capital
Treasury Stock
Accumulated Other Comprehensive Income
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 
$ (142,993,595)
$ 148,733,680 
$ 6,352,230 
 
Beginning Balance (in shares) at Dec. 29, 2012
 
73,696,644 
 
 
 
 
 
 
 
Stock-based compensation
2,210,528 
 
2,210,528 
 
 
 
2,210,528 
 
 
Vesting of restricted stock (in shares)
 
207,500 
 
 
 
 
 
 
 
Vesting of restricted stock
0 
2,075 
(2,075)
 
 
 
 
 
 
Net unrealized holding gain on marketable securities
(2,833,871)
 
 
 
(2,745,809)
 
(2,745,809)
 
 
Other Comprehensive Income (Loss), Net of Tax
(2,833,871)
 
 
 
 
 
 
(88,062)
 
Proceeds from Sales of Business, Affiliate and Productive Assets
(4,253,680)
 
 
 
(1,580,629)
 
(1,580,629)
(2,673,051)
 
Noncontrolling Interest, Increase from Business Combination
200,198 
 
 
 
 
 
 
200,198 
 
Stockholders' Equity Attributable to Noncontrolling Interest
322,834 
 
(1,020,130)
 
355,300 
 
(664,830)
(2,997,570)
(3,662,400)
Restricted stock for tax withholdings (in shares)
 
0 
 
 
 
 
 
 
 
Restricted stock for tax withholdings
(11,449)
0 
(11,449)
 
 
 
(11,449)
 
 
Treasury Stock, Value, Acquired, Cost Method
2,230,843 
 
 
2,230,843 
 
 
2,230,843 
 
 
Net loss
13,253,052 
 
 
 
 
13,723,963 
13,723,963 
(470,911)
 
Ending Balance at Jun. 29, 2013
$ 157,757,445 
$ 739,041 
$ 320,105,369 
$ (36,681,821)
$ 2,541,654 
$ (129,269,632)
$ 157,434,611 
$ 322,834 
 
Ending Balance (in shares) at Jun. 29, 2013
 
73,904,144 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
6 Months Ended
Jun. 29, 2013
Jun. 30, 2012
Cash flows from operating activities:
 
 
Net (loss) income
$ 13,253,052 
$ (7,592,880)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
 
 
Depreciation and amortization
2,135,458 
5,132,790 
Amortization of premium or discount on marketable debt securities
(66,181)
(142,119)
Stock-based compensation
2,419,528 
2,223,828 
Net gain on sale of investments
0 
(856,170)
Losses in unconsolidated affiliates
182,785 
390,202 
Other than Temporary Impairment Losses, Investments
2,485,393 
0 
Impairment of goodwill
0 
1,704,770 
Proceeds received from divestiture
(33,452,176)
0 
Deferred income tax asset
300,700 
581,370 
Foreign currency losses
(596,213)
98,441 
Change in allowance for bad debt
(56,072)
(124,976)
Change in inventory reserves
807,964 
547,318 
Other Noncash Income (Expense)
0 
(300,000)
Changes in assets and liabilities:
 
 
Accounts receivable
4,349,611 
3,061,759 
Inventory
1,569,883 
29,185 
Prepaid expenses and other current assets
(232,787)
69,014 
Accounts payable and accrued expenses
(1,005,477)
(3,538,983)
Billings in excess of revenue earned
710,455 
(50,000)
Net cash provided by operating activities
(7,194,077)
1,233,549 
Proceeds from Sales of Business, Affiliate and Productive Assets
(4,253,680)
 
Cash flows from investing activities:
 
 
Proceeds from sale of marketable debt securities
12,201,313 
17,579,205 
Purchase of marketable debt securities
(45,321,366)
(20,275,585)
Proceeds from Divestiture of Businesses, Net of Cash Divested
55,188,020 
0 
Noncontrolling Interest, Increase from Equity Issuance or Sale of Parent Equity Interest
(3,662,400)
0 
Cash paid to acquire Ikanos, net of cash acquired
211,484 
0 
Cash paid to acquire FDD, net of cash acquired
0 
94,351 
Purchase of investments
(2,750,278)
(2,249,784)
Proceeds from sale of investments
0 
856,170 
Other assets
(8,681)
73,189 
Capital expenditures
(513,780)
(5,748,450)
Net cash used in investing activities
19,006,712 
(9,670,904)
Cash flows from financing activities:
 
 
Treasury stock purchases
(2,230,843)
(3,455,529)
Settlements of restricted stock for tax withholding obligations
(11,449)
(96,917)
Net cash used in financing activities
(5,904,692)
(3,552,446)
Effect of exchange rate changes on cash
(243,778)
54,834 
Net decrease in cash and equivalents
5,664,165 
(11,934,967)
Cash and equivalents:
 
 
Beginning of period
27,135,387 
 
End of period
32,799,552 
31,160,196 
Supplemental disclosure of cash flow information:
 
 
Income taxes paid
113,700 
197,000 
Supplemental schedule of noncash investing activities:
 
 
Construction in progress included in accrued expenses
0 
361,000 
Notes Receivable, Fair Value Disclosure
$ 14,833,000 
 
BASIS OF PRESENTATION
BASIS OF PRESENTATION
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include the accounts of Kopin Corporation, its wholly-owned subsidiaries, Kowon Technology Co., Ltd. (Kowon), a majority owned (93%)  subsidiary located in Korea, Ikanos Consulting Ltd. (Ikanos) a majority owned (51%) subsidiary located in the United Kingdom, and eMDT America Inc. (eMDT), a majority owned (51%) subsidiary located in California (collectively the “Company”). Ownership interests of Kowon, Ikanos and eMDT not attributable to the Company are referred to as noncontrolling interests. All intercompany transactions and balances have been eliminated. The condensed consolidated financial statements for the three and six months ended June 29, 2013 and June 30, 2012 are unaudited and include all adjustments which, in the opinion of management, are necessary to present fairly the results of operations for the periods then ended. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 29, 2012.
During the first quarter of 2013, the Company paid approximately $3.7 million to acquire an additional 15% ownership in its Kowon subsidiary from the minority shareholders, as part of the Company's plan to close Kowon. The sale of the facility does not meet the criteria for assets held for sale based on the anticipated time to sell the facility.
The results of the Company's operations for any interim period are not necessarily indicative of the results of the Company's operations for any other interim period or for a full fiscal year.
In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.  ASU No. 2013-02 requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under United States Generally Accepted Accounting Principles (U.S. GAAP) to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU No. 2013-02 is effective for reporting periods beginning after December 15, 2012. The Company adopted this ASU on December 30, 2012 with no impact on its financial statements.

During the six months ended June 29, 2013, the change in the Company's accumulated other comprehensive income was the net of $(1.2) million cumulative translation adjustment, $(1.6) million unrealized holding losses on marketable securities and $(1.6) million related to the sale of its III-V product line and $0.4 million related to its acquisition of additional noncontrolling interest in Kowon.
DISCONTINUED OPERATIONS
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
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, a wholly owned subsidiary of the Company established to facilitate the sale of the Company's investment in KTC to IQE KC, LLC and IQE plc pursuant to a Purchase Agreement (the Purchase Agreement) entered into on January 10, 2013 for an aggregate purchase price of approximately $75 million, subject to working capital adjustments and certain other adjustments. Upon agreement of the final working capital and other adjustments the net purchase price was $70.2 million and the gain on sale, net of tax was $20.4 million. Under the terms of the Purchase Agreement, $55 million was paid to the Company in January 2013, $0.2 million was paid in April 2013 and the remaining $15 million will be paid to the Company on the third anniversary of the Closing Date. Payment of the $15 million is also secured by liens on certain assets of the business sold. The Company has recorded the $15.0 million receivable at the discounted value of $14.8 million, at the date of disposition, which is included in other assets on the condensed consolidated balance sheet.
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. The assets and liabilities associated with the III-V product line are presented as current assets held for sale, noncurrent assets held for sale, current liabilities held for sale and noncurrent liabilities held for sale in the consolidated balance sheet as of December 29, 2012.
CASH AND EQUIVALENTS AND MARKETABLE SECURITIES
CASH AND EQUIVALENTS AND MARKETABLE SECURITIES
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 certificates of deposit, medium-term corporate debt, and United States government and agency backed securities. The Company classifies these marketable debt securities as available-for-sale in “Marketable Debt Securities”. The investments in Advanced Wireless Semiconductor Company (AWSC) and WIN Semiconductor Corp. (WIN) are included in other assets on the condensed consolidated balance sheet as available-for-sale and recorded at fair value. The Company records the amortization of premium and accretion of discount 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 and maturities of marketable debt securities were not material during the six months ended June 29, 2013 and the year ended December 29, 2012.
Investments in available-for-sale marketable debt securities are as follows at June 29, 2013 and December 29, 2012:
 
Amortized Cost

Unrealized Gains

Unrealized Losses

Fair Value
 
2013

2012

2013

2012

2013

2012

2013

2012
U.S. government and agency backed securities
$
74,515,552


$
38,074,136


$
—


$
508,820


$
(533,308
)

$
—


$
73,982,244


$
38,582,956

Corporate debt and certificates of deposit
23,796,063


27,031,866


—


—


(194,147
)

(264,860
)

23,601,916


26,767,006

Total
$
98,311,615

 
$
65,106,002

 
$
—

 
$
508,820

 
$
(727,455
)
 
$
(264,860
)
 
$
97,584,160

 
$
65,349,962


The contractual maturity of the Company’s marketable debt securities is as follows at June 29, 2013:
 
Less than
One year
 
One to
Five years
 
Greater than
Five years
 
Total
U.S. government and agency backed securities
$
13,998,600

 
$
47,956,612

 
$
12,027,032

 
$
73,982,244

Corporate debt and certificates of deposit
18,803,291

 
3,827,375

 
971,250

 
23,601,916

Total
$
32,801,891

 
$
51,783,987

 
$
12,998,282

 
$
97,584,160


The Company conducts a review of its marketable debt securities on a quarterly basis for the presence of other-than-temporary impairment (OTTI). The Company assesses whether OTTI is present when the fair value of a debt security is less than its amortized cost basis at the balance sheet date. Under these circumstances OTTI is considered to have occurred (1) if the Company intends to sell the security before recovery of its amortized cost basis; (2) if it is “more likely than not” the Company will be required to sell the security before recovery of its amortized cost basis; or (3) the present value of expected cash flows is not sufficient to recover the entire amortized cost basis.
The Company 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 loss. The Company did not record an OTTI for the three and six months ended June 29, 2013 and June 30, 2012.
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
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 following table details the fair value measurements of the Company’s financial assets:
 
 
 
Fair Value Measurement at June 29, 2013 Using:
 
 
 
Level 1
 
Level 2
 
Level 3
Money Markets, Cash and Equivalents
$
32,799,552

 
$
32,799,552

 
$
—

 
$
—

U.S. Government Securities
73,982,244

 
53,252,948

 
20,729,296

 
—

Corporate Debt
11,364,444

 
—

 
11,364,444

 
—

Certificates of Deposit
12,237,472

 
—

 
12,237,472

 
—

WIN Semiconductor Corp.
1,339,644

 
1,339,644

 
—

 
—

Advanced Wireless Semiconductor Company
1,211,318

 
1,211,318

 
—

 
—

 
$
132,934,674

 
$
88,603,462

 
$
44,331,212

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurement at December 29, 2012 Using:
 
 
 
Level 1
 
Level 2
 
Level 3
Money Markets, Cash and Equivalents
$
27,135,387

 
$
27,135,387

 
$
—

 
$
—

U.S. Government Securities
38,582,956

 
17,576,878

 
21,006,078

 
—

Corporate Debt
11,095,227

 
—

 
11,095,227

 
—

Certificates of Deposit
15,671,779

 
—

 
15,671,779

 
—

WIN Semiconductor Corp.
1,410,388

 
1,410,388

 
—

 
—

Advanced Wireless Semiconductor Company
1,764,657

 
1,764,657

 
—

 
—

 
$
95,660,394

 
$
47,887,310

 
$
47,773,084

 
$
—


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 (three month Libor). The Company determines the fair market values of these corporate debt instruments through the use of a model which incorporates the three month Libor, the credit default swap rate of the issuer and the bid and ask price spread of the 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.  If accrued liabilities were carried at fair value, these would be classified as Level 2 in the fair value hierarchy.
Subsequent to June 29, 2013, the Company sold its investments in Advanced Wireless Semiconductor Company and WIN Semiconductor Corp. for $1.2 million and $1.4 million, respectively.
INVENTORY
INVENTORY
INVENTORY
Inventory is stated at the lower of cost (determined on the first-in, first-out) or market and consists of the following at June 29, 2013 and December 29, 2012:
 
June 29, 2013
 
December 29, 2012
Raw materials
$
950,816

 
$
2,540,497

Work-in-process
2,171,094

 
1,880,202

Finished goods
547,024

 
1,369,054

 
$
3,668,934

 
$
5,789,753

NET (LOSS) INCOME PER SHARE
NET (LOSS) INCOME PER SHARE
NET INCOME (LOSS) PER SHARE
Basic net income (loss) per share is computed using the weighted average number of shares of common stock outstanding during the period less any non-vested restricted shares. Diluted earnings per common share, if applicable, 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 units.
Weighted average common shares outstanding used to calculate earnings per share are as follows:
 
Three Months Ended
 
Six Months Ended
 
June 29, 2013
 
June 30, 2012
 
June 29, 2013
 
June 30, 2012
Weighted average common shares outstanding-basic
62,492,352

 
63,078,510

 
62,160,046

 
63,651,983

Stock options and non-vested restricted common stock
—

 
—

 
1,282,420

 
—

Weighted average common shares outstanding-diluted
62,492,352

 
63,078,510

 
63,442,466

 
63,651,983


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.
 
June 29, 2013
 
June 30, 2012
Non-vested restricted common stock
410,000

 
2,888,463

Stock options
848,334

 
1,838,615

Total
1,258,334

 
4,727,078

STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
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 the six month period ended June 29, 2013, or in fiscal year 2012. The fair value of non-vested restricted common stock awards is generally the market value of the Company’s common stock on the date of grant. The non-vested 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. For non-vested 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 non-vested 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.
In 2011, the Company granted 380,000 shares of phantom stock which will be settled in cash 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 $5.25, prior to September 12, 2016. The vesting of the awards upon achieving a closing stock price of $5.25 for 10 consecutive days is considered a market condition which requires the Company to periodically assess the fair market value of the award, with increases or decrease in the fair market value being reflected in the statement of operations.
On May 9, 2013, the Compensation Committee of the Company approved the issuances of 1,051,000 shares of non -vested restricted common stock to officers and other employees of the Company which vest at the rate of 20% per year over 5 years if the officer or employee remains with the Company. The Compensation Committee of the Company also approved the issuance of 600,000 shares of non-vested restricted common stock to the Chief Executive Officer (CEO) of the Company which vest if certain performance and market criteria are met and the CEO remains with the Company during the period in which the criteria are met.
A summary of award activity under the stock option plans as of June 29, 2013 and changes during the six month period is as follows (all options were vested as of June 29, 2013):
 
Six Months Ended June 29, 2013
 
Shares
 
Weighted
Average
Exercise
Price
Balance, December 29, 2012
983,680

 
$
5.26

Options forfeited/canceled
(130,346
)
 
5.60

Options exercised
—

 
—

Balance, all exercisable, June 29, 2013
853,334

 
$
5.21


The following table summarizes information about stock options outstanding and exercisable at June 29, 2013:
 
Options Outstanding and Exercisable
Range of Exercise Prices
Number
Outstanding
and
Exercisable
 
Weighted
Average
Remaining
Contractual
Life (Years)
 
Weighted
Average
Exercise
Price
$ 0.01—$ 3.50
130,000

 
2.00
 
$
3.49

$ 3.75—$ 4.82
204,350

 
1.00
 
3.77

$ 5.00—$ 8.03
418,984

 
0.30
 
5.30

$10.00
100,000

 
1.00
 
10.00


853,334

 
0.81
 
$
5.21

Aggregate intrinsic value on June 29, 2013
$
29,050

 

 


The Company has issued warrants to purchase 200,000 shares of the Company’s stock for $3.49 per share.
Non-Vested Restricted Common Stock
A summary of the activity for non-vested restricted common stock awards as of June 29, 2013 and changes during the six month period is presented below:
 
Shares
 
Weighted
Average
Grant
Fair
Value
Balance, December 29, 2012
2,283,048

 
$
4.76

Granted
2,015,000

 
3.21

Forfeited
(177,000
)
 
4.02

Vested
(103,929
)
 
3.58

Balance, June 29, 2013
4,017,119

 
$
4.04


Stock-Based Compensation
The following table summarizes stock-based compensation expense within each of the categories below as it relates to non-vested restricted common stock awards for the six months ended June 29, 2013 and June 30, 2012 (no tax benefits were recognized):
 
Six Months Ended
 
June 29,
2013
 
June 30,
2012
Cost of product revenues
$
118,692

 
$
178,483

Research and development
125,774

 
132,492

Selling, general and administrative
2,175,062

 
1,783,141

Total
$
2,419,528

 
$
2,094,116


Unrecognized compensation expense for non-vested restricted common stock as of June 29, 2013 totaled $7.7 million and is expected to be recognized over a weighted average period of 4 years.
OTHER ASSETS AND AMOUNTS DUE TO / FROM AFFILIATES
OTHER ASSETS AND AMOUNTS DUE TO / FROM AFFILIATES
OTHER ASSETS AND AMOUNTS DUE TO / FROM AFFILIATES
Marketable Equity Securities
As of June 29, 2013 and December 29, 2012, the Company had an investment in AWSC, with a fair market value of $1.2 million and $1.8 million, respectively, and an adjusted cost basis of $0.7 million and $0.7 million, respectively. One of the Company’s directors is a director of AWSC and several directors of the Company own amounts ranging from 1.0% to 0.5% of the outstanding stock of AWSC.
As of June 29, 2013 and December 29, 2012, the Company had an investment in WIN, with a fair market value of $1.3 million and $1.4 million, respectively, and an adjusted cost basis of $0.
AWSC and WIN are listed on the Gre Tai Securities Exchange in Taiwan. The Company determines the fair market value of these investments based on the quoted prices from this exchange.
Non-Marketable Securities—Equity Method Investments
The Company has an approximate 12% ownership interest in KoBrite at June 29, 2013. The Company accounts for its interest using the equity method and at June 29, 2013 the carrying value of the investment was $1.6 million. One of the Company’s directors, who is the chairman of KTC, is a member of the Board of Directors of Bright LED, principal investor of KoBrite.
During the three month period ended March 31, 2012 the Company acquired a 25% interest in Ikanos, a private company, for $0.7 million. On July 10, 2012, the Company invested an additional $2.5 million, which increased the Company’s interest in Ikanos to 51%. For the six month period ended June 30, 2012 the Company recorded the results of operation of Ikanos on the equity method of accounting and commencing in the third quarter of 2012 the Company consolidated Ikanos.
Summarized income statements for the three and six month periods ended June 30, 2012 include the results of both KoBrite for the three month periods ended December 31, 2011 and March 31, 2012 (KoBrite's results are recorded one quarter in arrears) and Ikanos for the three and six month periods ended June 30, 2012. Summarized income statements for the three and six month periods ended June 29, 2013 include KoBrite's results for the three month period ended December 29, 2012 and March 30, 2013.
 
Three Months Ended
 
Six Months Ended
 
June 29,
2013
 
June 30,
2012
 
June 29,
2013
 
June 30,
2012
Revenue
$
1,312,000

 
$
1,170,000

 
$
2,375,000

 
$
2,915,000

Gross margin
(528,000
)
 
(653,000
)
 
(1,093,000
)
 
(885,000
)
Loss from operations
(885,000
)
 
(1,505,000
)
 
(1,872,000
)
 
(2,283,000
)
Net loss
$
(713,000
)
 
$
(1,532,000
)
 
$
(1,557,000
)
 
$
(2,843,000
)

In 2012, the Company acquired a 5% interest in a private company for $1.0 million and in January of 2013 the Company acquired an additional 10% for $900,000. If the private company achieves certain development milestones, the Company is obligated to acquire an additional 7.5% interest in the private company for a total of $1.9 million. In addition, for an eight month period after the achievement of all of the development milestones, the Company has the right to acquire an additional 10% interest in the private company for an additional $2.0 million or the private company can require the Company to purchase an additional 25% interest for an additional $2.0 million. As of June 29, 2013, the Company is accounting for its investment using the cost method.
During the first quarter of 2013, the Company acquired four patents for $1.8 million and hired the patents' inventor. Upon commencement of employment the Company issued to the employee 400,000 shares of the Company's common stock, of which 100,000 shares were immediately vested and 300,000 shares will vest upon the achievement of certain milestones.
During the six months ended June 29, 2013, the Company recorded an impairment of $2.5 million related to the write-off of a cost based investment.
ACQUISITION OF IKANOS and eMDT
ACQUISITION OF IKANOS
ACQUISITION OF eMDT AND IKANOS
In April 2013, the Company acquired 51% of the outstanding stock of eMDT, a private company, for $400,000. The assets, liabilities and results of operations of eMDT have been consolidated within the Company's financial statements since April 17, 2013. The Company has an option to acquire an additional 25% of the Company for $200,000. In connection with the acquisition, the Company has preliminary allocated excess purchase price in the amount of approximately $400,000 to goodwill.  The Company's purchase accounting is preliminary as the Company is finalizing the value of assets and liabilities acquired including its identification of intangible assets. 
The Company's goodwill balance is as follows:
 
 
Balance, December 29, 2012
$
684,789

Acquisition of eMDT
395,713

Balance, June 29, 2013
$
1,080,502

During the three months ended March 31, 2012 the Company acquired a 25% interest in Ikanos, a private company and accounted for its interest using the equity method of accounting. In July 2012, the Company purchased an additional 26% of Ikanos common stock and as a result of these transactions the Company owns approximately 51% of the now outstanding stock of Ikanos. The remaining 49% is held by other investors and employees of Ikanos.
The assets, liabilities and results of operations of Ikanos have been within the Company's financial statements since July 1, 2012. The Company finalized its purchase accounting for the acquisition in the quarter ended March 30, 2013.  There were no changes to the provisional balances as of December 29, 2012.
The unaudited pro forma financial results for the three month period ended June 30, 2012 combine the unaudited historical results of the Company along with the unaudited historical results of Ikanos and e-MDT. The results include the effects of unaudited pro forma adjustments as if Ikanos and e-MDT were acquired on January 1, 2012 (the first day of the Company's fiscal year 2012). There were no material nonrecurring pro forma adjustments in the calculation of revenue or earnings. The pro forma financial results presented below do not include any anticipated synergies or other expected benefits of the acquisition. These results are presented for informational purposes only and are not necessarily indicative of future operations.
 
Six Months
Ended
June 29, 2013
Six Months
Ended
June 30, 2012
Three Months
Ended
June 30, 2012
Revenues
$
12,603,000

$
18,771,000

$
7,325,000

Net income (loss)
$
13,764,000

$
(8,388,000
)
$
(5,936,000
)
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 the six months ended June 29, 2013 are as follows:
 
 
 Balance, December 29, 2012
$
716,000

Additions
418,000

Claim and reversals
(418,000
)
Balance, June 29, 2013
$
716,000

INCOME TAXES
INCOME TAXES
INCOME TAXES
The Company’s tax provision of approximately $0.2 million for the three months ended June 29, 2013 represents state income tax liabilities on its domestic taxable earnings and estimated foreign taxes due on its international subsidiaries' taxable earnings. The tax benefit of approximately $12.8 million for the six months ended June 29, 2013 represents the net of the above and an intraperiod tax allocation related to the Company's discontinued operations. The income tax benefit of $0.1 million and provision of $0 for the corresponding periods in 2012, represents state income taxes and foreign tax expenses, which are partially offset by tax credits.
For the six months ended June 29, 2013, discontinued operations reflects the gain on the sale of the III-V product line and investment in KTC. The Company has federal net operating loss carryforwards which may be used to offset the gain on the sale of the III-V product line and investment in KTC. The federal tax benefit from the utilization of the net operating losses is shown in the Company's tax provision in the condensed consolidated statement of operations. Included in the sales price related to the disposition of the III-V product line and the investment in KTC is a $15.0 million note receivable which is due in three years. The note provides the Company with alternative tax treatments in computing the taxes associated with the transaction. The Company has until the end of its fiscal year to make a final determination on the tax treatment of the transaction and accordingly the final taxes and the amount of net operating loss carryforward utilized may change.

In accordance with U.S. GAAP, intraperiod tax allocation provisions require allocation of a tax expense to the gain on discontinued operations based upon the Company's statutory tax rate. The Company has net operating loss (NOL) carryforwards available to offset the tax expense. The benefit of these NOLs is reflected in the tax benefit from continuing operations. Accordingly, the Company has recorded a tax expense in discontinued operations and a benefit in continuing operations of $13.1 million.
As of June 29, 2013, the Company has available for tax purposes U.S. federal NOLs of $21.1 million expiring through 2032. The Company has recognized a full valuation allowance on its domestic and certain foreign net deferred tax assets due to the uncertainty of realization of such 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 approximate $13.0 million.
The Company’s income tax returns have not been examined by the Internal Revenue Service and are subject to examination for all years since 2002. State income tax returns are generally subject to examination for a period of 3 to 5 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.
SEGMENTS AND GEOGRAPHICAL INFORMATION
SEGMENTS AND GEOGRAPHICAL INFORMATION
. SEGMENTS AND GEOGRAPHICAL INFORMATION
The Company’s chief operating decision maker is its Chief Executive Officer. During the period ended June 29, 2013, the Company transferred the manufacturing operations of Kowon to the Company's manufacturing facility in the United States and sold its III-V product line including its investment in KTC. As a result of these transactions, the Company has reorganized its operations to align with its new strategy to primarily focus on developing its body-worn voice activated and gesture controlled cloud computing systems and display products. Accordingly, the Company has determined it has one reportable segment and the segment information for the prior periods presented has been recast to reflect the change in reportable segments.
During the three and six month periods ended June 29, 2013 and June 30, 2012, the Company derived its sales from the following geographies (as a percentage of net revenues):
 
Three Months Ended
 
Six Months Ended
 
June 29, 2013
 
June 30, 2012
 
June 29, 2013
 
June 30, 2012
Asia-Pacific
30
%
 
22
%
 
29
%
 
21
%
Americas
61
%
 
75
%
 
62
%
 
78
%
Europe
9
%
 
3
%
 
9
%
 
1
%
Total Revenues
100
%
 
100
%
 
100
%
 
100
%
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.
DISCONTINUED OPERATIONS Results from Discontinued Operations (Tables)
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]
The following table summarizes the results from discontinued operations (in millions):
 
Six Months Ended
 
June 29, 2013
 
June 30, 2012
Net product and research and development revenues
$
2.3

 
$
30.2

Loss from discontinued operations before income taxes
(0.2
)
 
2.4

Provision for income taxes on discontinued operations
—

 
(0.8
)
Discontinued operations, net of tax
$
(0.2
)
 
$
1.6

Gain on sale, net of $13.1 million of tax
20.4

 
—

Income from discontinued operations, net of tax
$
20.2

 
$
1.6

CASH AND EQUIVALENTS AND MARKETABLE SECURITIES (Tables)
Cash Cash Equivalents and Marketable Securities Table 
Investments in available-for-sale marketable debt securities are as follows at June 29, 2013 and December 29, 2012:
 
Amortized Cost

Unrealized Gains

Unrealized Losses

Fair Value
 
2013

2012

2013

2012

2013

2012

2013

2012
U.S. government and agency backed securities
$
74,515,552


$
38,074,136


$
—


$
508,820


$
(533,308
)

$
—


$
73,982,244


$
38,582,956

Corporate debt and certificates of deposit
23,796,063


27,031,866


—


—


(194,147
)

(264,860
)

23,601,916


26,767,006

Total
$
98,311,615

 
$
65,106,002

 
$
—

 
$
508,820

 
$
(727,455
)
 
$
(264,860
)
 
$
97,584,160

 
$
65,349,962

Marketable Debt Securities 
The contractual maturity of the Company’s marketable debt securities is as follows at June 29, 2013:
 
Less than
One year
 
One to
Five years
 
Greater than
Five years
 
Total
U.S. government and agency backed securities
$
13,998,600

 
$
47,956,612

 
$
12,027,032

 
$
73,982,244

Corporate debt and certificates of deposit
18,803,291

 
3,827,375

 
971,250

 
23,601,916

Total
$
32,801,891

 
$
51,783,987

 
$
12,998,282

 
$
97,584,160

FAIR VALUE MEASUREMENTS (Tables)
Fair Value Measurements of Financial Instruments
The following table details the fair value measurements of the Company’s financial assets:
 
 
 
Fair Value Measurement at June 29, 2013 Using:
 
 
 
Level 1
 
Level 2
 
Level 3
Money Markets, Cash and Equivalents
$
32,799,552

 
$
32,799,552

 
$
—

 
$
—

U.S. Government Securities
73,982,244

 
53,252,948

 
20,729,296

 
—

Corporate Debt
11,364,444

 
—

 
11,364,444

 
—

Certificates of Deposit
12,237,472

 
—

 
12,237,472

 
—

WIN Semiconductor Corp.
1,339,644

 
1,339,644

 
—

 
—

Advanced Wireless Semiconductor Company
1,211,318

 
1,211,318

 
—

 
—

 
$
132,934,674

 
$
88,603,462

 
$
44,331,212

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurement at December 29, 2012 Using:
 
 
 
Level 1
 
Level 2
 
Level 3
Money Markets, Cash and Equivalents
$
27,135,387

 
$
27,135,387

 
$
—

 
$
—

U.S. Government Securities
38,582,956

 
17,576,878

 
21,006,078

 
—

Corporate Debt
11,095,227

 
—

 
11,095,227

 
—

Certificates of Deposit
15,671,779

 
—

 
15,671,779

 
—

WIN Semiconductor Corp.
1,410,388

 
1,410,388

 
—

 
—

Advanced Wireless Semiconductor Company
1,764,657

 
1,764,657

 
—

 
—

 
$
95,660,394

 
$
47,887,310

 
$
47,773,084

 
$
—


INVENTORY (Tables)
Inventory Stated at the Lower of Cost or Market
Inventory is stated at the lower of cost (determined on the first-in, first-out) or market and consists of the following at June 29, 2013 and December 29, 2012:
 
June 29, 2013
 
December 29, 2012
Raw materials
$
950,816

 
$
2,540,497

Work-in-process
2,171,094

 
1,880,202

Finished goods
547,024

 
1,369,054

 
$
3,668,934

 
$
5,789,753

NET (LOSS) INCOME PER SHARE (Tables)
Weighted Average Common Shares Outstanding 
Weighted average common shares outstanding used to calculate earnings per share are as follows:
 
Three Months Ended
 
Six Months Ended
 
June 29, 2013
 
June 30, 2012
 
June 29, 2013
 
June 30, 2012
Weighted average common shares outstanding-basic
62,492,352

 
63,078,510

 
62,160,046

 
63,651,983

Stock options and non-vested restricted common stock
—

 
—

 
1,282,420

 
—

Weighted average common shares outstanding-diluted
62,492,352

 
63,078,510

 
63,442,466

 
63,651,983

Weighted Average Common Shares Outstanding-Diluted 
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.
 
June 29, 2013
 
June 30, 2012
Non-vested restricted common stock
410,000

 
2,888,463

Stock options
848,334

 
1,838,615

Total
1,258,334

 
4,727,078

STOCK-BASED COMPENSATION (Tables)
Stock- Based Compensation 
A summary of award activity under the stock option plans as of June 29, 2013 and changes during the six month period is as follows (all options were vested as of June 29, 2013):
 
Six Months Ended June 29, 2013
 
Shares
 
Weighted
Average
Exercise
Price
Balance, December 29, 2012
983,680

 
$
5.26

Options forfeited/canceled
(130,346
)
 
5.60

Options exercised
—

 
—

Balance, all exercisable, June 29, 2013
853,334

 
$
5.21

Stock Options Outstanding and Exercisable 
The following table summarizes information about stock options outstanding and exercisable at June 29, 2013:
 
Options Outstanding and Exercisable
Range of Exercise Prices
Number
Outstanding
and
Exercisable
 
Weighted
Average
Remaining
Contractual
Life (Years)
 
Weighted
Average
Exercise
Price
$ 0.01—$ 3.50
130,000

 
2.00
 
$
3.49

$ 3.75—$ 4.82
204,350

 
1.00
 
3.77

$ 5.00—$ 8.03
418,984

 
0.30
 
5.30

$10.00
100,000

 
1.00
 
10.00


853,334

 
0.81
 
$
5.21

Aggregate intrinsic value on June 29, 2013
$
29,050

 

 

NonVested Restricted Common Stock 
A summary of the activity for non-vested restricted common stock awards as of June 29, 2013 and changes during the six month period is presented below:
 
Shares
 
Weighted
Average
Grant
Fair
Value
Balance, December 29, 2012
2,283,048

 
$
4.76

Granted
2,015,000

 
3.21

Forfeited
(177,000
)
 
4.02

Vested
(103,929
)
 
3.58

Balance, June 29, 2013
4,017,119

 
$
4.04

Stock-Based Compensation Expense 
The following table summarizes stock-based compensation expense within each of the categories below as it relates to non-vested restricted common stock awards for the six months ended June 29, 2013 and June 30, 2012 (no tax benefits were recognized):
 
Six Months Ended
 
June 29,
2013
 
June 30,
2012
Cost of product revenues
$
118,692

 
$
178,483

Research and development
125,774

 
132,492

Selling, general and administrative
2,175,062

 
1,783,141

Total
$
2,419,528

 
$
2,094,116

OTHER ASSETS AND AMOUNTS DUE TO / FROM AFFILIATES (Tables)
Summary of Financial Information for KoBrite
Summarized income statements for the three and six month periods ended June 30, 2012 include the results of both KoBrite for the three month periods ended December 31, 2011 and March 31, 2012 (KoBrite's results are recorded one quarter in arrears) and Ikanos for the three and six month periods ended June 30, 2012. Summarized income statements for the three and six month periods ended June 29, 2013 include KoBrite's results for the three month period ended December 29, 2012 and March 30, 2013.
 
Three Months Ended
 
Six Months Ended
 
June 29,
2013
 
June 30,
2012
 
June 29,
2013
 
June 30,
2012
Revenue
$
1,312,000

 
$
1,170,000

 
$
2,375,000

 
$
2,915,000

Gross margin
(528,000
)
 
(653,000
)
 
(1,093,000
)
 
(885,000
)
Loss from operations
(885,000
)
 
(1,505,000
)
 
(1,872,000
)
 
(2,283,000
)
Net loss
$
(713,000
)
 
$
(1,532,000
)
 
$
(1,557,000
)
 
$
(2,843,000
)
ACQUISITION OF IKANOS and eMDT (Tables)
Schedule of Business Acquisitions, by Acquisition 
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed 
Business Acquisition, Pro Forma Information 
 
Six Months
Ended
June 29, 2013
Six Months
Ended
June 30, 2012
Three Months
Ended
June 30, 2012
Revenues
$
12,603,000

$
18,771,000

$
7,325,000

Net income (loss)
$
13,764,000

$
(8,388,000
)
$
(5,936,000
)
ACCRUED WARRANTY (Tables)
Accrued Warranty
Changes in the accrued warranty for the six months ended June 29, 2013 are as follows:
 
 
 Balance, December 29, 2012
$
716,000

Additions
418,000

Claim and reversals
(418,000
)
Balance, June 29, 2013
$
716,000

SEGMENTS AND GEOGRAPHICAL INFORMATION (Tables)
Percentage of Net Revenues by Geographies
During the three and six month periods ended June 29, 2013 and June 30, 2012, the Company derived its sales from the following geographies (as a percentage of net revenues):
 
Three Months Ended
 
Six Months Ended
 
June 29, 2013
 
June 30, 2012
 
June 29, 2013
 
June 30, 2012
Asia-Pacific
30
%
 
22
%
 
29
%
 
21
%
Americas
61
%
 
75
%
 
62
%
 
78
%
Europe
9
%
 
3
%
 
9
%
 
1
%
Total Revenues
100
%
 
100
%
 
100
%
 
100
%
BASIS OF PRESENTATION (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 29, 2013
Jun. 29, 2013
Jun. 30, 2012
Dec. 29, 2012
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
 
 
 
 
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Changes, Purchase of Interest by Parent
$ 3,700,000 
 
 
 
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Changes, Additional Interest Issued to Parent
0.15 
 
 
 
Gain (Loss) on Sale of Business
 
33,452,176 
0 
 
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax
 
(2,833,871)
 
 
Stockholders' Equity Attributable to Noncontrolling Interest
322,834 
322,834 
 
6,352,230 
Kowon
 
 
 
 
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
 
 
 
 
Kopin's ownership percentage
93.00% 
93.00% 
 
 
Ikanos
 
 
 
 
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
 
 
 
 
Kopin's ownership percentage
51.00% 
51.00% 
 
 
eMDT
 
 
 
 
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
 
 
 
 
Kopin's ownership percentage
51.00% 
51.00% 
 
 
Accumulated Translation Adjustment
 
 
 
 
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax
(1,200,000)
(1,200,000)
 
 
Accumulated Net Unrealized Investment Gain (Loss)
 
 
 
 
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
 
 
 
 
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax
(1,600,000)
 
 
 
Business Acquisition One
 
 
 
 
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
 
 
 
 
Gain (Loss) on Sale of Business
(1,600,000)
 
 
 
Accumulated Other Comprehensive Income
 
 
 
 
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
 
 
 
 
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax
 
(2,745,809)
 
 
Stockholders' Equity Attributable to Noncontrolling Interest
$ 355,300 
$ 355,300 
 
 
DISCONTINUED OPERATIONS (Details) (USD $)
3 Months Ended 6 Months Ended 1 Months Ended 3 Months Ended 6 Months Ended
Jun. 29, 2013
Jun. 30, 2012
Jun. 29, 2013
Jun. 30, 2012
Jan. 31, 2013
III-V product line including all outstanding equity interest in KTC Wireless, LLC
Jun. 29, 2013
III-V product line including all outstanding equity interest in KTC Wireless, LLC
Jun. 29, 2013
III-V product line including all outstanding equity interest in KTC Wireless, LLC
Jun. 30, 2012
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]
 
 
 
 
 
 
 
 
 
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]
 
 
Text Block 
 
 
 
 
 
 
Aggregate purchase price
 
 
 
 
 
 
 
 
$ 75,000,000 
Business Acquisition, Cost of Acquired Entity, Purchase Price
70,200,000 
 
70,200,000 
 
 
 
 
 
 
Proceeds received from divestiture
 
 
 
 
55,000,000 
200,000 
 
 
 
Consideration to be paid on the third anniversary of the Closing Date
 
 
 
 
 
 
 
 
15,000,000 
Accounts and Notes Receivable, Net
14,800,000 
 
14,800,000 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
 
 
 
 
 
 
 
 
 
Net sales and other operating revenues
 
 
 
 
 
 
2,300,000 
30,200,000 
 
Income from operations before income taxes
 
 
 
 
 
 
(200,000)
2,400,000 
 
Provision for income taxes on operations
 
 
 
 
 
 
0 
(800,000)
 
Income from operations, net of tax
 
 
 
 
 
 
(200,000)
1,600,000 
 
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax
20,400,000 
 
 
 
 
 
20,400,000 
0 
 
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest
$ (49,356)
$ 1,328,961 
$ 20,147,532 
$ 1,574,661 
 
 
$ 20,200,000 
$ 1,600,000 
 
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] 
The following table summarizes the results from discontinued operations (in millions):
 
Six Months Ended
 
June 29, 2013
 
June 30, 2012
Net product and research and development revenues
$
2.3

 
$
30.2

Loss from discontinued operations before income taxes
(0.2
)
 
2.4

Provision for income taxes on discontinued operations
—

 
(0.8
)
Discontinued operations, net of tax
$
(0.2
)
 
$
1.6

Gain on sale, net of $13.1 million of tax
20.4

 
—

Income from discontinued operations, net of tax
$
20.2

 
$
1.6

CASH AND EQUIVALENTS AND MARKETABLE SECURITIES (Details) (USD $)
6 Months Ended
Jun. 29, 2013
Dec. 29, 2012
Jun. 30, 2012
Debt securities
Jun. 29, 2013
U.S. government and agency backed securities
Dec. 29, 2012
U.S. government and agency backed securities
Jun. 29, 2013
Corporate debt and certificates of deposit
Dec. 29, 2012
Corporate debt and certificates of deposit
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
 
 
 
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities
 
 
$ 0 
 
 
 
 
Amortized Cost
98,311,615 
65,106,002 
 
74,515,552 
38,074,136 
23,796,063 
27,031,866 
Unrealized Gains
0 
508,820 
 
0 
508,820 
0 
0 
Unrealized Losses
(727,455)
(264,860)
 
(533,308)
0 
(194,147)
(264,860)
Fair Value
97,584,160 
65,349,962 
 
73,982,244 
38,582,956 
23,601,916 
26,767,006 
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
 
 
 
 
 
 
 
Less than one year
32,801,891 
 
 
13,998,600 
 
18,803,291 
 
One to five years
51,783,987 
 
 
47,956,612 
 
3,827,375 
 
Greater than five years
$ 12,998,282 
 
 
$ 12,027,032 
 
$ 971,250 
 
FAIR VALUE MEASUREMENTS (Details) (USD $)
3 Months Ended
Sep. 30, 2013
WIN Semiconductor Corporation
Sep. 30, 2013
Advanced Wireless Semiconductor Company
Jun. 29, 2013
Level 1
Dec. 29, 2012
Level 1
Jun. 29, 2013
Level 1
Money Markets, Cash and Equivalents
Dec. 29, 2012
Level 1
Money Markets, Cash and Equivalents
Jun. 29, 2013
Level 1
U.S. Government Securities
Dec. 29, 2012
Level 1
U.S. Government Securities
Jun. 29, 2013
Level 1
Corporate Debt
Dec. 29, 2012
Level 1
Corporate Debt
Jun. 29, 2013
Level 1
Certificates of Deposit
Dec. 29, 2012
Level 1
Certificates of Deposit
Jun. 29, 2013
Level 1
WIN Semiconductor Corporation
Dec. 29, 2012
Level 1
WIN Semiconductor Corporation
Jun. 29, 2013
Level 1
Advanced Wireless Semiconductor Company
Dec. 29, 2012
Level 1
Advanced Wireless Semiconductor Company
Jun. 29, 2013
Level 2
Dec. 29, 2012
Level 2
Jun. 29, 2013
Level 2
Money Markets, Cash and Equivalents
Dec. 29, 2012
Level 2
Money Markets, Cash and Equivalents
Jun. 29, 2013
Level 2
U.S. Government Securities
Dec. 29, 2012
Level 2
U.S. Government Securities
Jun. 29, 2013
Level 2
Corporate Debt
Dec. 29, 2012
Level 2
Corporate Debt
Jun. 29, 2013
Level 2
Certificates of Deposit
Dec. 29, 2012
Level 2
Certificates of Deposit
Jun. 29, 2013
Level 2
WIN Semiconductor Corporation
Dec. 29, 2012
Level 2
WIN Semiconductor Corporation
Jun. 29, 2013
Level 2
Advanced Wireless Semiconductor Company
Dec. 29, 2012
Level 2
Advanced Wireless Semiconductor Company
Jun. 29, 2013
Level 3
Dec. 29, 2012
Level 3
Jun. 29, 2013
Level 3
Money Markets, Cash and Equivalents
Dec. 29, 2012
Level 3
Money Markets, Cash and Equivalents
Jun. 29, 2013
Level 3
U.S. Government Securities
Dec. 29, 2012
Level 3
U.S. Government Securities
Jun. 29, 2013
Level 3
Corporate Debt
Dec. 29, 2012
Level 3
Corporate Debt
Jun. 29, 2013
Level 3
Certificates of Deposit
Dec. 29, 2012
Level 3
Certificates of Deposit
Jun. 29, 2013
Level 3
WIN Semiconductor Corporation
Dec. 29, 2012
Level 3
WIN Semiconductor Corporation
Jun. 29, 2013
Level 3
Advanced Wireless Semiconductor Company
Dec. 29, 2012
Level 3
Advanced Wireless Semiconductor Company
Jun. 29, 2013
Estimate of Fair Value
Dec. 29, 2012
Estimate of Fair Value
Jun. 29, 2013
Estimate of Fair Value
Money Markets, Cash and Equivalents
Dec. 29, 2012
Estimate of Fair Value
Money Markets, Cash and Equivalents
Jun. 29, 2013
Estimate of Fair Value
U.S. Government Securities
Dec. 29, 2012
Estimate of Fair Value
U.S. Government Securities
Jun. 29, 2013
Estimate of Fair Value
Corporate Debt
Dec. 29, 2012
Estimate of Fair Value
Corporate Debt
Jun. 29, 2013
Estimate of Fair Value
Certificates of Deposit
Dec. 29, 2012
Estimate of Fair Value
Certificates of Deposit
Jun. 29, 2013
Estimate of Fair Value
WIN Semiconductor Corporation
Dec. 29, 2012
Estimate of Fair Value
WIN Semiconductor Corporation
Jun. 29, 2013
Estimate of Fair Value
Advanced Wireless Semiconductor Company
Dec. 29, 2012
Estimate of Fair Value
Advanced Wireless Semiconductor Company
Fair Value Measurements [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Instruments, Owned, at Fair Value
 
 
$ 88,603,462 
$ 47,887,310 
$ 32,799,552 
$ 27,135,387 
$ 53,252,948 
$ 17,576,878 
    
    
    
    
$ 1,339,644 
$ 1,410,388 
$ 1,211,318 
$ 1,764,657 
$ 44,331,212 
$ 47,773,084 
    
    
$ 20,729,296 
$ 21,006,078 
$ 11,364,444 
$ 11,095,227 
$ 12,237,472 
$ 15,671,779 
    
    
    
    
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 132,934,674 
$ 95,660,394 
$ 32,799,552 
$ 27,135,387 
$ 73,982,244 
$ 38,582,956 
$ 11,364,444 
$ 11,095,227 
$ 12,237,472 
$ 15,671,779 
$ 1,339,644 
$ 1,410,388 
$ 1,211,318 
$ 1,764,657 
Proceeds from Sale of Available-for-sale Securities
$ 1,200,000 
$ 1,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVENTORY (Details) (USD $)
Jun. 29, 2013
Dec. 29, 2012
Inventory Disclosure [Abstract]
 
 
Raw materials
$ 950,816 
$ 2,540,497 
Work-in-process
2,171,094 
1,880,202 
Finished goods
547,024 
1,369,054 
Inventory
$ 3,668,934 
$ 5,789,753 
NET (LOSS) INCOME PER SHARE (Details)
3 Months Ended 6 Months Ended
Jun. 29, 2013
Jun. 30, 2012
Jun. 29, 2013
Jun. 30, 2012
Earnings Per Share [Abstract]
 
 
 
 
Weighted average common shares outstanding - basic
62,492,352 
63,078,510 
62,160,046 
63,651,983 
Stock options and non-vested restricted common stock
0 
0 
1,282,420 
0 
Weighted average common shares outstanding - diluted
62,492,352 
63,078,510 
63,442,466 
63,651,983 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Antidilutive securities excluded from computation of earnings per share
 
 
1,258,334 
4,727,078 
Non-vested restricted common stock
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Antidilutive securities excluded from computation of earnings per share
 
 
410,000 
2,888,463 
Stock options
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Antidilutive securities excluded from computation of earnings per share
 
 
848,334 
1,838,615 
STOCK-BASED COMPENSATION (Details) (USD $)
In Millions, except Share data, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 29, 2013
Dec. 31, 2011
Class of Warrant or Right [Line Items]
 
 
Restricted stock and phantom stock, vesting period following the grant date
 
10 days 
Common stock, price per share
 
$ 5.25 
Warrant issued to purchase company's stock
200,000 
 
Warrant issued to purchase company's stock, exercise price
$ 3.49 
 
Period 1
 
 
Class of Warrant or Right [Line Items]
 
 
Nonvested common stock awards employment obligations (in years)
1 year 
 
Period 2
 
 
Class of Warrant or Right [Line Items]
 
 
Nonvested common stock awards employment obligations (in years)
2 years 
 
Period 3
 
 
Class of Warrant or Right [Line Items]
 
 
Nonvested common stock awards employment obligations (in years)
4 years 
 
Phantom stock
 
 
Class of Warrant or Right [Line Items]
 
 
Compensation awards, number of shares of stock granted
 
380,000 
Restricted stock
 
 
Class of Warrant or Right [Line Items]
 
 
Unrecognized compensation cost related to nonvested stock awards
$ 7.7 
 
Unrecognized compensation cost related to nonvested stock awards, period of recognition (in years)
4 years 
 
STOCK-BASED COMPENSATION - Summay of Award Activity under the Stock Option Plans and Changes (Details) (USD $)
6 Months Ended
Jun. 29, 2013
Shares
 
Beginning Balance
983,680 
Options forfeited/cancelled
(130,346)
Options exercised
0 
Ending Balance
853,334 
Weighted Average Exercise Price
 
Beginning Balance
$ 5.26 
Options forfeited/cancelled
$ 5.60 
Options exercised
$ 0.00 
Ending Balance
$ 5.21 
STOCK-BASED COMPENSATION - Stock Options Outstanding and Exercisable (Details) (USD $)
6 Months Ended
Jun. 29, 2013
Dec. 29, 2012
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
 
Number Outstanding and Exercisable
853,334 
983,680 
Weighted Average Remaining Contractual Life (Years)
9 months 22 days 
 
Weighted Average Exercise Price
$ 5.21 
$ 5.26 
Aggregate intrinsic value on September 29, 2012
$ 29,050 
 
Range 1
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
 
Range of Exercise Prices, Lower Limit
$ 0.01 
 
Range of Exercise Prices, Upper Limit
$ 3.50 
 
Number Outstanding and Exercisable
130,000 
 
Weighted Average Remaining Contractual Life (Years)
2 years 
 
Weighted Average Exercise Price
$ 3.49 
 
Range 2
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
 
Range of Exercise Prices, Lower Limit
$ 3.75 
 
Range of Exercise Prices, Upper Limit
$ 4.82 
 
Number Outstanding and Exercisable
204,350 
 
Weighted Average Remaining Contractual Life (Years)
1 year 
 
Weighted Average Exercise Price
$ 3.77 
 
Range 3
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
 
Range of Exercise Prices, Lower Limit
$ 5.00 
 
Range of Exercise Prices, Upper Limit
$ 8.03 
 
Number Outstanding and Exercisable
418,984 
 
Weighted Average Remaining Contractual Life (Years)
3 months 18 days 
 
Weighted Average Exercise Price
$ 5.30 
 
Range 4
 
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
 
Range of Exercise Prices, Lower Limit
$ 10.00 
 
Range of Exercise Prices, Upper Limit
$ 10.00 
 
Number Outstanding and Exercisable
100,000 
 
Weighted Average Remaining Contractual Life (Years)
1 year 
 
Weighted Average Exercise Price
$ 10.00 
 
STOCK-BASED COMPENSATION - Summary of Activity for Nonvested Restricted Common Stock Awards (Details) (Non-vested restricted common stock, USD $)
6 Months Ended
Jun. 29, 2013
Non-vested restricted common stock
 
Shares
 
Beginning Balance
2,283,048 
Granted
2,015,000 
Forfeited
(177,000)
Vested
(103,929)
Ending Balance
4,017,119 
Weighted Average Grant Fair Value
 
Beginning Balance
$ 4.76 
Granted
$ 3.21 
Forfeited
$ 4.02 
Vested
$ 3.58 
Ending Balance
$ 4.04 
STOCK-BASED COMPENSATION - Expense Related to Employee Stock Options and Nonvested Restricted Common Stock Awards (Details) (USD $)
6 Months Ended
Jun. 29, 2013
Jun. 30, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Stock-based compensation
$ 2,419,528 
$ 2,094,116 
Cost of product revenues
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Stock-based compensation
118,692 
178,483 
Research and development
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Stock-based compensation
125,774 
132,492 
Selling, general and administrative
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Stock-based compensation
$ 2,175,062 
$ 1,783,141 
OTHER ASSETS AND AMOUNTS DUE TO / FROM AFFILIATES (Details) (USD $)
3 Months Ended 6 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 9 Months Ended 6 Months Ended 12 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 3 Months Ended
Jun. 29, 2013
Jun. 30, 2012
Jun. 29, 2013
Jun. 30, 2012
Dec. 29, 2012
Jun. 29, 2013
Noncontrolling Interest
Mar. 31, 2012
Ikanos
Jun. 29, 2013
Ikanos
Jun. 30, 2012
Ikanos
Sep. 29, 2012
Ikanos
Jun. 29, 2013
Business Acquisition Two
Dec. 29, 2012
Business Acquisition Two
Mar. 14, 2013
Business Acquisition Two
Noncontrolling Interest
Jun. 29, 2013
Business Acquisition Two
Noncontrolling Interest
Jun. 29, 2013
Business Acquisition Two
Ownership Increases in Subsidiaries, Affiliates
Mar. 14, 2013
Business Acquisition Two
Ownership Increases in Subsidiaries, Affiliates
Dec. 29, 2012
Minimum
Business Acquisition Two
Jun. 29, 2013
Maximum
Business Acquisition Two
Jun. 29, 2013
WIN Semiconductor Corporation
Dec. 29, 2012
WIN Semiconductor Corporation
Jun. 29, 2013
Ko Brite
Jun. 30, 2012
Ko Brite
Jun. 29, 2013
Ko Brite
Jun. 30, 2012
Ko Brite
Jun. 29, 2013
Advanced Wireless Semiconductor Company
Dec. 29, 2012
Advanced Wireless Semiconductor Company
Jun. 29, 2013
Advanced Wireless Semiconductor Company
Minimum
Jun. 29, 2013
Advanced Wireless Semiconductor Company
Maximum
Mar. 14, 2013
Subsequent Event
Business Acquisition Two
Mar. 14, 2013
Subsequent Event
Aurisound
Jun. 29, 2013
Founder of Acquired Company
Subsequent Event
Deferred Compensation, Share-based Payments
Mar. 14, 2013
Founder of Acquired Company
Subsequent Event
Deferred Compensation, Share-based Payments
Immediate Vesting
Mar. 14, 2013
Founder of Acquired Company
Subsequent Event
Deferred Compensation, Share-based Payments
Achievement of Certain Milestones
Dec. 29, 2012
WIN Semiconductor Corporation
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment, fair market value
$ 97,584,160 
 
$ 97,584,160 
 
$ 65,349,962 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,300,000 
 
 
 
 
 
$ 1,200,000 
$ 1,800,000 
 
 
 
 
 
 
 
$ 1,400,000 
Investment, adjusted cost basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
0 
 
 
 
 
700,000 
700,000 
 
 
 
 
 
 
 
 
Directors and officers, percent of investment in AWSC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
0.50% 
 
 
 
 
 
 
Company's ownership percentage
 
 
 
 
 
 
 
25.00% 
 
 
 
 
 
25.00% 
10.00% 
25.00% 
5.00% 
7.50% 
 
 
12.00% 
 
12.00% 
 
 
 
 
 
 
 
 
 
 
 
Carrying value of the investment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,600,000 
 
1,600,000 
 
 
 
 
 
 
 
 
 
 
 
Purchase of equity method investment
 
 
 
 
 
 
 
700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company's ownership percentage
 
 
 
 
 
 
 
 
 
51.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional investment in Ikanos Investment
 
 
 
 
 
 
 
 
 
2,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summarized Income Statements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
6,078,645 
7,011,578 
12,397,730 
17,877,608 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,312,000 
1,170,000 
2,375,000 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Pro Forma Revenue
 
 
 
 
 
 
7,325,000 
12,603,000 
18,771,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,915,000 
 
 
 
 
 
 
 
 
 
 
Gross margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(528,000)
(653,000)
(1,093,000)
(885,000)
 
 
 
 
 
 
 
 
 
 
(Loss) income from operations
(8,635,800)
(6,699,531)
(18,277,793)
(10,193,853)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(885,000)
(1,505,000)
(1,872,000)
(2,283,000)
 
 
 
 
 
 
 
 
 
 
Net loss
(8,111,338)
(5,124,794)
13,253,052 
(7,592,880)
 
(470,911)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(713,000)
(1,532,000)
(1,557,000)
(2,843,000)
 
 
 
 
 
 
 
 
 
 
Additional investment in private company
 
 
 
 
 
 
 
 
 
 
1,900,000 
1,000,000 
 
 
2,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
900,000 
 
 
 
 
 
Cost Method Investment, Additional Equity Interest Acquired or to Be Acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10.00% 
 
 
 
 
 
Additional investment for additional interest
 
 
2,750,278 
2,249,784 
 
 
 
 
 
 
 
 
200,000 
2,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Combination, Consideration Transferred
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,800,000 
 
 
 
 
License fees from the sale of patents
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other than Temporary Impairment Losses, Investments
$ 2,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Compensation Arrangement with Individual, Shares Issued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
400,000 
100,000 
300,000 
 
ACQUISITION OF IKANOS and eMDT (Details) (USD $)
6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Jun. 29, 2013
Jun. 30, 2012
Jun. 29, 2013
eMDT
Mar. 31, 2012
Ikanos
Jun. 29, 2013
Ikanos
Jun. 30, 2012
Ikanos
Dec. 29, 2012
Ikanos
Jul. 10, 2012
Ikanos
Jun. 29, 2013
Ownership Increases in Subsidiaries, Affiliates
Business Acquisition Two
Mar. 14, 2013
Ownership Increases in Subsidiaries, Affiliates
Business Acquisition Two
Mar. 14, 2013
Noncontrolling Interest
Business Acquisition Two
Jun. 29, 2013
Noncontrolling Interest
Business Acquisition Two
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative Percentage of Voting Interests Acquired
 
 
51.00% 
25.00% 
 
 
 
 
 
 
 
 
Business Combination, Step Acquisition, Additional Equity Interest In Acquiree, Shares
 
 
 
 
 
 
 
0.26 
 
 
 
 
Business Combination, Consideration Transferred
 
 
$ 400,000 
 
 
 
 
 
 
 
 
 
Equity Method Investment, Ownership Percentage
 
 
 
 
25.00% 
 
 
 
10.00% 
25.00% 
 
25.00% 
Payments to Acquire Investments
2,750,278 
2,249,784 
 
 
 
 
 
 
 
 
200,000 
2,000,000 
Business Acquisition, Purchase Price Allocation, Goodwill Amount
400,000 
 
 
 
 
 
 
 
 
 
 
 
Kopin's ownership percentage
 
 
 
 
 
 
51.00% 
 
 
 
 
 
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners
 
 
 
 
 
 
49.00% 
 
 
 
 
 
Business Acquisition, Pro Forma Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
7,325,000 
12,603,000 
18,771,000 
 
 
 
 
 
 
Net (loss) income
 
 
 
$ (5,936,000)
$ 13,764,000 
$ (8,388,000)
 
 
 
 
 
 
ACQUISITION OF IKANOS and eMDT -Schedule of Company Goodwill (Details) (USD $)
6 Months Ended
Jun. 29, 2013
Business Combinations [Abstract]
 
Beginning Balance
$ 684,789 
Acquisition of eMDT
395,713 
Ending Balance
$ 1,080,502 
ACCRUED WARRANTY (Details) (USD $)
6 Months Ended
Jun. 29, 2013
Product Warranties Disclosures [Abstract]
 
Product warranty term
12 months 
Movement in Standard Product Warranty Accrual [Roll Forward]
 
Beginning Balance
$ 716,000 
Additions
418,000 
Claim and reversals
(418,000)
Ending Balance
$ 716,000 
INCOME TAXES (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 29, 2013
Jun. 30, 2012
Jun. 29, 2013
Jun. 30, 2012
Income Taxes [Line Items]
 
 
 
 
State income and foreign tax expenses
$ 194,000 
$ (85,500)
$ (12,846,000)
$ 12,800 
Notes, Loans and Financing Receivable, Gross, Noncurrent
70,200,000 
 
70,200,000 
 
Income Taxes Paid, Net
0 
 
 
 
Net operating loss carryforwards available for tax purposes
21,100,000 
 
21,100,000 
 
Net operating loss carryforwards, expiration date
 
 
expiring through 2032 
 
Unrecorded benefits from stock award
 
 
13,000,000 
 
Alternative Minimum And State Income Tax
 
 
 
 
Income Taxes [Line Items]
 
 
 
 
State income and foreign tax expenses
0 
0 
0 
0 
Purchase Price Allocation Adjustments
 
 
 
 
Income Taxes [Line Items]
 
 
 
 
Notes, Loans and Financing Receivable, Gross, Noncurrent
$ 15,000,000 
 
$ 15,000,000 
 
Minimum
 
 
 
 
Income Taxes [Line Items]
 
 
 
 
State income tax returns examination period
 
 
3 years 
 
Maximum
 
 
 
 
Income Taxes [Line Items]
 
 
 
 
State income tax returns examination period
 
 
5 years 
 
The state impact of any federal changes, subject to examination by various states (in years)
 
 
1 year 
 
SEGMENTS AND GEOGRAPHICAL INFORMATION (Details)
3 Months Ended 6 Months Ended
Jun. 29, 2013
Jun. 30, 2012
Jun. 29, 2013
Jun. 30, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Percentage of total revenue
100.00% 
100.00% 
100.00% 
100.00% 
Asia-Pacific
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Percentage of total revenue
30.00% 
22.00% 
29.00% 
21.00% 
Americas
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Percentage of total revenue
61.00% 
75.00% 
62.00% 
78.00% 
Europe
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Percentage of total revenue
9.00% 
3.00% 
9.00% 
1.00%