KOPIN CORP, 10-Q filed on 5/9/2019
Quarterly Report
v3.19.1
Document and Entity Information - shares
3 Months Ended
Mar. 30, 2019
May 06, 2019
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 30, 2019  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q1  
Trading Symbol KOPN  
Entity Registrant Name KOPIN CORP  
Entity Central Index Key 0000771266  
Current Fiscal Year End Date --12-28  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Common Stock, Shares Outstanding   84,133,574
v3.19.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
Mar. 30, 2019
Dec. 29, 2018
Current assets:    
Cash and cash equivalents $ 16,583,525 $ 14,326,347
Marketable debt securities, at fair value 20,288,917 22,918,016
Accounts receivable, net of allowance of $551,000 in 2019 and $304,000 in 2018 3,800,689 3,088,360
Contract assets and unbilled receivables 2,141,677 3,089,663
Inventory 4,174,350 4,797,238
Prepaid taxes 172,061 399,611
Prepaid expenses and other current assets 855,780 784,790
Total current assets 48,016,999 49,404,025
Plant and equipment, net 2,234,285 2,598,842
Operating lease right-of-use assets 3,496,947 0
Goodwill 331,344 331,344
Other assets 1,697,599 1,649,401
Equity investments 5,650,099 5,565,499
Total assets 61,427,273 59,549,111
Current liabilities:    
Accounts payable 4,492,572 3,921,880
Accrued payroll and expenses 2,117,370 3,038,005
Accrued warranty 584,000 571,000
Contract liabilities and billings in excess of revenue earned 1,189,772 388,933
Other accrued liabilities 3,006,409 1,901,547
Deferred tax liabilities 535,000 546,000
Total current liabilities 12,927,432 10,367,365
Asset retirement obligations 260,846 254,098
Operating lease liabilities, net of current portion 2,585,906 0
Other long-term obligations 1,044,147 1,214,827
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 87,951,373 shares in 2019 and 80,735,320 shares in 2018; outstanding 81,287,243 shares in 2019 and 74,008,815 shares in 2018 858,004 785,220
Additional paid-in capital 343,738,809 335,692,879
Treasury stock (4,513,256 shares in 2019 and 2018, at cost) (17,238,669) (17,238,669)
Accumulated other comprehensive income 1,651,904 1,554,587
Accumulated deficit (284,263,070) (272,932,143)
Total Kopin Corporation stockholders’ equity 44,746,978 47,861,874
Noncontrolling interest (138,036) (149,053)
Total stockholders’ equity 44,608,942 47,712,821
Total liabilities and stockholders’ equity 61,427,273 59,549,111
Operating lease liabilities—current $ 1,002,309 $ 0
v3.19.1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
Mar. 30, 2019
Dec. 29, 2018
Statement of Financial Position [Abstract]    
Accounts receivable, allowance $ 551,000 $ 304,000
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 87,951,373 80,735,320
Common stock, outstanding 81,287,243 74,008,815
Treasury stock, shares 4,513,256 4,513,256
v3.19.1
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - USD ($)
3 Months Ended
Mar. 30, 2019
Mar. 31, 2018
Revenues:    
Revenues $ 5,542,925 $ 5,653,620
Expenses:    
Research and development 4,966,716 4,451,653
Selling, general and administration 6,282,803 6,931,410
Total expenses 17,126,596 15,445,254
Loss from operations (11,583,671) (9,791,634)
Other income:    
Interest income 163,361 159,851
Other (expense) income (109,735) 1,101,255
Foreign currency transaction gains 236,135 208,608
Gain on investments 0 2,849,816
Total other income and expense 289,761 4,319,530
Loss before provision for income taxes and net income attributable to noncontrolling interest (11,293,910) (5,472,104)
Provision for income taxes (26,000) 0
Net loss (11,319,910) (5,472,104)
Net income attributable to noncontrolling interest (11,017) (64,174)
Net loss attributable to Kopin Corporation $ (11,330,927) $ (5,536,278)
Net loss per share    
Basic and diluted (usd per share) $ (0.15) $ (0.08)
Weighted average number of common shares outstanding    
Basic and diluted (in shares) 74,968,981 73,078,344
Product [Member]    
Revenues:    
Revenues $ 4,613,856 $ 5,044,809
Expenses:    
Cost of Goods and Services Sold 5,877,077 4,062,191
Service [Member]    
Revenues:    
Revenues $ 929,069 $ 608,811
v3.19.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
3 Months Ended
Mar. 30, 2019
Mar. 31, 2018
Statement of Comprehensive Income [Abstract]    
Net (loss) income $ (11,319,910) $ (5,472,104)
Other comprehensive (loss) income, net of tax:    
Foreign currency translation adjustments (122,064) (124,480)
Unrealized holding losses on marketable securities 222,000 (136,874)
Reclassification of holding losses in net loss (2,619) (4,750)
Other comprehensive income (loss), net of tax 97,317 (266,104)
Comprehensive loss (11,222,593) (5,738,208)
Comprehensive income attributable to the noncontrolling interest (11,017) (67,933)
Comprehensive loss attributable to Kopin Corporation $ (11,233,610) $ (5,806,141)
v3.19.1
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
Beginning balance at Dec. 30, 2017 $ 77,379,847 $ 775,720 $ 331,119,340 $ (17,238,669) $ 3,564,779 $ (240,121,901) $ 78,099,269 $ (719,422)
Beginning Balance (in shares) at Dec. 30, 2017   77,572,038            
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Stock-based compensation 1,399,415   1,399,415       1,399,415  
Vesting of restricted stock (shares)   20,000            
Vesting of restricted stock   $ 200 (200)          
Other comprehensive loss (266,104)       (269,863)   (269,863) 3,759
Adoption of accounting standards 3,059,382           3,059,382  
Net (loss) income (5,472,104)         (5,536,278) (5,536,278) 64,174
Ending balance at Mar. 31, 2018 76,100,436 $ 775,920 332,518,555 (17,238,669) 3,294,916 (242,598,797) 76,751,925 (651,489)
Ending Balance (in shares) at Mar. 31, 2018   77,592,038            
Beginning balance at Dec. 30, 2017 77,379,847 $ 775,720 331,119,340 (17,238,669) 3,564,779 (240,121,901) 78,099,269 (719,422)
Beginning Balance (in shares) at Dec. 30, 2017   77,572,038            
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net (loss) income 35,800,000              
Ending balance at Dec. 29, 2018 47,712,821 $ 785,220 335,692,879 (17,238,669) 1,554,587 (272,932,143) 47,861,874 (149,053)
Ending Balance (in shares) at Dec. 29, 2018   78,522,066            
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Stock-based compensation 815,842   815,842       815,842  
Vesting of restricted stock (shares)   10,000            
Vesting of restricted stock   $ 100 (100)          
Repurchases of restricted stock to satisfy tax withholding obligations (in shares)   (4,294)            
Repurchases of restricted stock to satisfy tax withholding obligations (7,128) $ (43) (7,085)       (7,128)  
Other comprehensive loss 97,317       97,317   97,317  
Sale of registered stock 7,310,000 72,727 7,237,273       7,310,000  
Net (loss) income (11,319,910)         (11,330,927) (11,330,927) 11,017
Ending balance at Mar. 30, 2019 $ 44,608,942 $ 858,004 $ 343,738,809 $ (17,238,669) $ 1,651,904 $ (284,263,070) $ 44,746,978 $ (138,036)
Ending Balance (in shares) at Mar. 30, 2019   85,800,499            
v3.19.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
3 Months Ended
Mar. 30, 2019
Mar. 31, 2018
Cash flows from operating activities:    
Net (loss) income $ (11,319,910) $ (5,472,104)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:    
Depreciation and amortization 264,389 554,967
Stock-based compensation 815,842 1,399,415
Foreign currency losses (233,180) (218,943)
Change in allowance for bad debt 246,970 (136,095)
Unrealized gain on investments 0 (2,849,816)
Loss on disposal of plant and equipment (180,308) 0
Write-off of excess inventory 1,253,988 442,691
Other non-cash items 32,732 0
Changes in assets and liabilities, net of acquired assets and liabilities:    
Accounts receivable (953,353) 1,461,884
Contract assets 947,986 1,124,634
Inventory (620,982) (198,961)
Prepaid expenses and other current assets 221,926 98,008
Accounts payable and accrued expenses 393,941 (2,644,054)
Billings in excess of revenue earned 922,540 379,330
Net cash used in operating activities (7,846,803) (6,059,044)
Cash flows provided by investing activities:    
Other assets (50,000) (87,632)
Capital expenditures (74,920) (553,793)
Proceeds from sale of marketable debt securities 2,789,139 6,909,855
Cash paid for equity investment 0 (1,000,000)
Net cash provided by investing activities 2,664,219 5,268,430
Cash flows (used in) provided by financing activities:    
Sale of registered stock 7,450,000 0
Settlements of restricted stock for tax withholding obligations 7,128 0
Net cash provided by financing activities 7,442,872 0
Effect of exchange rate changes on cash (3,110) 110,287
Net increase (decrease) in cash and cash equivalents 2,257,178 (680,327)
Cash and cash equivalents:    
Beginning of period 14,326,347  
End of period 16,583,525  
Supplemental disclosure of cash flow information:    
Issuance costs included in accounts payable and accrued expenses 140,000  
Income taxes paid $ 0 $ 1,429,000
v3.19.1
BASIS OF PRESENTATION
3 Months Ended
Mar. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BASIS OF PRESENTATION
BASIS OF PRESENTATION
The condensed consolidated financial statements of Kopin Corporation as of March 30, 2019 and for the three month periods ended March 30, 2019 and March 31, 2018 are unaudited and include all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the periods then ended. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2018. The results of the Company's operations for any interim period are not necessarily indicative of the results of the Company's operations for any other interim period or for a full fiscal year. The Company reclassified certain prior period amounts to conform to the current period presentation. As used in this report, the terms "we", "us", "our", "Kopin" and the "Company" mean Kopin Corporation and its subsidiaries, unless the context indicates another meaning.
Going Concern
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses of $35.8 million and net cash outflows from operations of $28.2 million for the fiscal year ended 2018. The Company incurred a net loss of $11.3 million for the three months ended March 30, 2019 and net cash outflows from operations of $7.8 million. In addition, the Company has experienced a significant decline in its cash and cash equivalents and marketable debt securities over the last several years, which was primarily a result of funding operating losses, of which a significant component relates to the Company’s ongoing investments in the research and development of Wearable products. On March 15, 2019, the Company sold 7.3 million shares of registered common stock for gross proceeds of $8.0 million ($1.10 per share), before deducting underwriting discounts and offering expenses payable by the Company. The Company had $36.9 million of cash and cash equivalents and marketable debt securities at March 30, 2019. The Company's historical and current use of cash in operations combined with limited liquidity resources raise substantial doubt regarding the Company’s ability to continue as a going concern.
The Company’s products are targeted towards the wearable market, which management believes is still developing and cannot predict how long the wearable market will take to develop or if the Company’s products will be accepted.  Accordingly, the Company’s current strategy is to continue to invest in research and development, even during unprofitable periods, which may result in the Company continuing to incur net losses and negative cash flows from operations.  If the Company is unable to achieve and maintain positive cash flows and profitability in the foreseeable future, its financial condition may ultimately be materially adversely affected such that management may be required to reduce operating expenses, including investments in research and development, or raise additional capital. While there can be no assurance the Company will be able to successfully reduce operating expenses or raise additional capital, management believes its historical success in managing cash flows and obtaining capital will continue in the foreseeable future.
These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
v3.19.1
ACCOUNTING STANDARDS Accounting Standards (Notes)
3 Months Ended
Mar. 30, 2019
Leases [Abstract]  
Accounting Standards
ACCOUNTING STANDARDS
Recently Adopted Accounting Standards
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842), which requires lessees to recognize operating lease right-of-use assets and lease liability for most lease arrangements. Effective December 30, 2018, the Company adopted the requirements of the new lease standard using the modified retrospective approach, applying the new lease requirements at the beginning of fiscal year 2019. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allows us to carry forward the historical lease classification. The Company did not elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of right-of-use assets. The standard resulted in the recognition of operating lease right-of-use assets of $3.7 million and operating lease liabilities of $3.8 million, of which $1.0 million was classified as current at the beginning of fiscal year 2019. The standard had no material impact on the Company's results of operations or cash flows and there was no cumulative impact on accumulated deficit as of December 30, 2018. In addition, new disclosures are provided to enable readers to assess the amount, timing and uncertainty of cash flows arising from leases.
Significant Accounting Policies Update
The Company's significant accounting policies are detailed in "Note 1: Summary of Significant Accounting Policies" of our Annual Report on Form 10-K for the fiscal year ended December 29, 2018. Effective December 30, 2019, the Company adopted the requirements of ASU 2016-02, Leases (Topic 842) using the modified retrospective approach as discussed below. The Company reclassified certain balance sheet accounts to conform to the Company's current period presentation. All amounts disclosed in this Form 10-Q reflect these changes.
Leases
The Company determines if an arrangement is a lease or contains an embedded lease at inception. For lease arrangements with both lease and non-lease components (e.g., common-area maintenance costs), the Company accounts for the non-lease components separately.
All of the Company's leases are operating leases. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of future lease payments over the lease term at the commencement date. The operating lease right-of-use assets also includes any initial direct costs and any lease payments made at or before the commencement date, and is reduced for any unrestricted incentives received at or before the commencement date.
For the majority of the Company's leases, the discount rate used to determine the present value of the lease payments is the Company's incremental borrowing rate at the lease commencement date, as the implicit rate is not readily determinable. The discount rate represents a risk-adjusted rate on a secured basis, and is the rate at which the Company would borrow funds to satisfy the scheduled lease liability payment streams commensurate with the lease term. On December 30, 2018, the discount rate used on existing leases at adoption was determined based on the remaining lease term using available data as of that date. For new or renewed leases starting in 2019, the discount rate is determined using available data at lease commencement and based on the lease term including any reasonably certain renewal periods.
Some of our leases include options to extend or terminate the lease. The Company includes these options in the recognition of the Company's ROU assets and lease liabilities when it is reasonably certain that the Company will exercise the option. In most cases, the Company has concluded that renewal and early termination options are not reasonably certain of being exercised by the Company (and thus not included in our ROU asset and lease liability) unless there is an economic, financial or business reason to do so. None of our leases include variable lease-related payments, such as escalation clauses based on the consumer price index ("CPI") rates or residual guarantees.
Accounting Standards Issued But Not Yet Adopted
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which adds, amends and removes certain disclosure requirements related to fair value measurements. Among other changes, this standard requires certain additional disclosure surrounding Level 3 assets, including changes in unrealized gains or losses in other comprehensive income and certain inputs in those measurements. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain amended or eliminated disclosures in this standard may be adopted early, while certain additional disclosure requirements in this standard can be adopted on its effective date. In addition, certain changes in the standard require retrospective adoption, while other changes must be adopted prospectively. The Company is currently evaluating ASU 2018-13 and its impact on our consolidated financial statements.
v3.19.1
CASH AND EQUIVALENTS AND MARKETABLE SECURITIES
3 Months Ended
Mar. 30, 2019
Cash and Equivalents and Marketable Securities Disclosure [Abstract]  
CASH AND EQUIVALENTS AND MARKETABLE SECURITIES
CASH AND CASH EQUIVALENTS AND MARKETABLE DEBT 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 U.S. 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 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 and maturities of marketable debt securities were not material during the three months ended March 30, 2019 and the fiscal year ended December 29, 2018.
Investments in available-for-sale marketable debt securities were as follows at March 30, 2019 and December 29, 2018:
 
Amortized Cost

Unrealized Losses

Fair Value
 
2019

2018

2019

2018

2019

2018
U.S. government and agency backed securities
$
11,307,655


$
13,064,418


$
(136,955
)

$
(253,495
)

$
11,170,700


$
12,810,923

Corporate debt
9,131,568

 
10,175,084

 
(13,351
)
 
(67,991
)
 
9,118,217

 
10,107,093

Total
$
20,439,223

 
$
23,239,502

 
$
(150,306
)
 
$
(321,486
)
 
$
20,288,917

 
$
22,918,016


The contractual maturity of the Company’s marketable debt securities was as follows at March 30, 2019:
 
Less than
One year
 
One to
Five years
 
Total
U.S. government and agency backed securities
$
1,994,750

 
$
9,175,950

 
$
11,170,700

Corporate debt
2,671,796

 
6,446,421

 
9,118,217

Total
$
4,666,546

 
$
15,622,371

 
$
20,288,917

v3.19.1
FAIR VALUE MEASUREMENTS
3 Months Ended
Mar. 30, 2019
Fair Value Disclosures [Abstract]  
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 March 30, 2019 Using:
 
Total
 
Level 1
 
Level 2
 
Level 3
Cash and Cash Equivalents
$
16,583,525

 
$
16,583,525

 
$

 
$

U.S. Government Securities
11,170,700

 

 
11,170,700

 

Corporate Debt
9,118,217

 

 
9,118,217

 

GCS Holdings
336,384

 
336,384

 

 

Equity Investments
5,650,099

 

 

 
5,650,099

 
$
42,858,925

 
$
16,919,909

 
$
20,288,917

 
$
5,650,099

 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurement December 29, 2018 Using:
 
Total
 
Level 1
 
Level 2
 
Level 3
Cash and Cash Equivalents
$
14,326,347

 
$
14,326,347

 
$

 
$

U.S. Government Securities
12,810,923

 

 
12,810,923

 

Corporate Debt
10,107,093

 

 
10,107,093

 

GCS Holdings
288,026

 
288,026

 

 

Equity Investments
5,565,499

 

 

 
5,565,499

 
$
43,097,888

 
$
14,614,373

 
$
22,918,016

 
$
5,565,499

Transfers between levels of the fair value hierarchy are reported at the beginning of the reporting period in which they occur. Changes in Level 3 investments were as follows:
 
December 29, 2018
 
Net unrealized gains
 
Purchases, issuances and settlements
 
Transfers in and or out of Level 3
 
March 30, 2019
Equity Investments
$
5,565,499

 
$
84,600

 
$

 
$

 
$
5,650,099


The carrying amounts of cash and 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.
Marketable Debt Securities
The corporate debt consists of floating rate notes with a maturity that is over multiple years but has interest rates that are reset every three months based on the then-current three-month London Interbank Offering Rate ("three-month Libor"). The Company validates the fair market values of the financial instruments above by using discounted cash flow models, obtaining independent pricing of the securities or through the use of a model that 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.
Equity Investments
The Company acquired an equity interest in a company in the first quarter of 2018. The Company made a $1.0 million capital contribution during the three months ended March 31, 2018. The Company also contributed certain intellectual property. During the three months ended March 30, 2019, the Company recorded a $0.1 million unrealized gain on this equity investment due to a fluctuation in the foreign exchange rate. As of March 30, 2019, the Company owned an 11.0% interest in this investment and the fair value of this equity investment was approximately $3.7 million at March 30, 2019.
The Company owns an interest in an equity investment whose fair value was approximately $1.9 million at March 30, 2019. The Company adopted the measurement alternative for equity investments without readily determinable fair values (often referred to as cost method investments). As a result, these investments will be revalued upon occurrence of an observable price change for similar investments and for impairments. The Company did not have an observable price change for similar investments of its equity investments and recorded no impairments on its equity investments during the three months ended March 30, 2019.
v3.19.1
INVENTORY
3 Months Ended
Mar. 30, 2019
Inventory Disclosure [Abstract]  
INVENTORY
INVENTORY
Inventories are stated at standard cost adjusted to approximate the lower of cost (first-in, first-out method) or net realizable value and consist of the following at March 30, 2019 and December 29, 2018:
 
March 30, 2019
 
December 29, 2018
Raw materials
$
2,509,173

 
$
2,548,139

Work-in-process
1,208,874

 
1,526,552

Finished goods
456,303

 
722,547

 
$
4,174,350

 
$
4,797,238

v3.19.1
NET LOSS PER SHARE
3 Months Ended
Mar. 30, 2019
Earnings Per Share [Abstract]  
NET LOSS PER SHARE
NET LOSS PER SHARE
Basic net loss per share is computed using the weighted-average number of shares of common stock outstanding during the period less any unvested restricted shares. Diluted net loss per 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 unvested restricted stock.
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:
 
Three months ended
 
March 30, 2019
 
March 31, 2018
Non-vested restricted common stock
2,150,874

 
3,454,274

v3.19.1
STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION
3 Months Ended
Mar. 30, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION
STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION
Registered sale of equity securities
On March 15, 2019, the Company sold 7.3 million shares of registered common stock for gross proceeds of $8.0 million ($1.10 per share), before deducting underwriting discounts and offering expenses paid by the Company. This represents approximately 8.9% of Kopin's total outstanding shares of common stock as of the date of purchase. The net proceeds from the offering were used for general corporate purposes, including working capital. On April 10, 2019, the Company sold 0.7 million shares of registered common stock for gross proceeds of $0.8 million ($1.10 per share), before deducting underwriting discounts and offering expenses paid by the Company, pursuant to the partial exercise of the underwriters' overallotment option in connection with its March 15, 2019 public offering. This represents approximately 0.8% of Kopin's total outstanding shares of common stock as of the date of purchase.
Non-Vested Restricted Common Stock
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 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. For non-vested restricted common stock awards that 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 that 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 anticipated service period. If the performance criteria are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed.
Restricted stock activity was as follows:
 
Shares
 
Weighted
Average
Grant
Fair
Value
Balance, December 29, 2018
2,213,249

 
$
2.51

Granted
70,000

 
1.26

Forfeited
(122,375
)
 
3.06

Vested
(10,000
)
 
2.90

Balance, March 30, 2019
2,150,874

 
$
2.44


On December 31, 2017, the Company amended the employment agreement with our CEO, Dr. John Fan, to expire on December 31, 2020 and as part of the amendment issued restricted stock grants. Of the restricted stock grants issued to Dr. Fan, 640,000 shares will vest upon the first 20 consecutive trading day period following the grant date during which the Company's common stock trades at a price equal to or greater than $5.25150,000 shares will vest at the end of the first 20 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, and 150,000 shares will vest at the end of the first 20 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. All of the grants are subject to certain acceleration events and expire on December 31, 2020. The total fair value of these awards on December 31, 2017 was $1.7 million. The value of restricted stock grants that vest based on market conditions is computed on the date of grant using the Monte Carlo model with the following assumptions:
 
For the three months ended March 30, 2019
Performance price target
$
5.25

 
$
6.00

 
$
7.00

Expected volatility
48.3
%
 
48.3
%
 
48.3
%
Interest rate
1.97
%
 
1.97
%
 
1.97
%
Expected life (years)
3

 
3

 
3

Dividend yield
%
 
%
 
%

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 three months ended March 30, 2019 and March 31, 2018 (no tax benefits were recognized):
 
Three Months Ended
 
March 30, 2019
 
March 31, 2018
Cost of product revenues
$
32,108

 
$
110,226

Research and development
104,730

 
274,316

Selling, general and administrative
679,004

 
1,014,873

Total
$
815,842

 
$
1,399,415

Unrecognized compensation expense for non-vested restricted common stock as of March 30, 2019 totaled $2.5 million and is expected to be recognized over a weighted average period of approximately two years.
v3.19.1
(Notes)
3 Months Ended
Mar. 30, 2019
Product Warranties Disclosures [Abstract]  
ACCRUED WARRANTY
ACCRUED WARRANTY
The Company typically warrants its products against defect for 12 to 18 months, however, for certain products a customer may purchase an extended warranty. A provision for estimated future costs and estimated returns for credit relating to such 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 three months ended March 30, 2019 were as follows:
Balance, December 29, 2018
$
571,000

Additions
180,000

Claims
(167,000
)
Balance, March 30, 2019
$
584,000


Extended Warranties
Deferred revenue represents the purchase of extended warranties by the Company's customers. The Company recognizes revenue from an extended warranty on the straight-line method over the life of the extended warranty, which is typically 12 to 15 months beyond the standard 12 to 18 month warranty. The Company classifies the current portion of deferred revenue under Other accrued liabilities in its condensed consolidated balance sheets. At March 30, 2019, the Company had $0.3 million of deferred revenue related to extended warranties.
v3.19.1
INCOME TAXES
3 Months Ended
Mar. 30, 2019
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES
The Company recorded a provision for income taxes of less than $0.1 million in the three months ended March 30, 2019 as compared to no provision for income taxes recorded in the three months ended March 31, 2018. As of March 30, 2019, the Company has available for tax purposes U.S. federal NOLs of approximately $208.0 million expiring 2022 through 2037. The Company had 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 recognizes both accrued interest and penalties related to its uncertain tax positions related to intercompany loan interest and potential transfer pricing exposure related to its foreign subsidiaries.
v3.19.1
CONTRACT ASSETS AND LIABILITIES (Notes)
3 Months Ended
Mar. 30, 2019
Contract Assets and Contract Liabilities [Abstract]  
CONTRACT ASSETS AND LIABILITIES
10.
CONTRACT ASSETS AND LIABILITIES
Contract assets include unbilled amounts typically resulting from sales under contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized from customer arrangements, including licensing, exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time. Amounts may not exceed their net realizable value. Contract assets are generally classified as current. The Company classifies the noncurrent portion of contract assets under other assets in its condensed consolidated balance sheets.
Contract liabilities consist of advance payments and billings in excess of cost incurred and deferred revenue.
Net contract assets (liabilities) consisted of the following:
 
March 30, 2019
 
December 29, 2018
 
$ Change
 
% Change
Contract assets—current
$
2,141,677

 
$
3,089,663

 
$
(947,986
)
 
(31
)%
Contract liabilities—current
(1,189,772
)
 
(388,933
)
 
(800,839
)
 
206
 %
Contract liabilities—noncurrent
(20,142
)
 
(17,294
)
 
(2,848
)
 
17
 %
Net contract assets (liabilities)
$
931,763

 
$
2,683,436

 
$
(1,751,673
)
 
(65
)%

The $1.8 million decrease in the Company's net contract assets (liabilities) from December 29, 2018 to March 30, 2019 was primarily due the shipment of inventory that was in process at December 29, 2018.
In the three months ended March 30, 2019, the Company recognized revenue of $0.1 million related to our contract liabilities at December 29, 2018. In the three months ended March 31, 2018, the Company recognized revenue of less than $0.1 million related to our contract liabilities at December 31, 2017.
The Company did not recognize impairment losses on our contract assets in the three months ended March 30, 2019 or March 31, 2018.
v3.19.1
LEASES (Notes)
3 Months Ended
Mar. 30, 2019
Leases [Abstract]  
LEASES
11. 
LEASES
The Company enters into operating leases primarily for: real estate, including for manufacturing, engineering, research, administration and sales facilities, and information technology ("IT") equipment. At March 30, 2019 and December 29, 2018, the Company did not have any finance leases. Approximately 86% of our future lease commitments, and related lease liability, relate to the Company's real estate leases. Some of the Company's leases include options to extend or terminate the lease.
The components of lease expense were as follows:
 
 
Three months ended
 
 
March 30, 2019
 
March 31, 2018
Operating lease cost
 
$
301,000

 
$
357,000


At March 30, 2019, the Company's future lease payments under non-cancellable leases were as follows:
2019 (excluding the three months ended March 30, 2019)
 
$
903,000

2020
 
1,223,000

2021
 
1,032,000

2022
 
656,000

2023
 
204,000

Thereafter
 

Total future lease payments
 
4,018,000

Less imputed interest
 
(430,000
)
Total
 
$
3,588,000


The Company's lease liabilities recognized in the Company's condensed consolidated balance sheet at March 30, 2019 was as follows:
 
 
 
March 30, 2019
Operating lease liabilities—current
 
$
1,002,309

Operating lease liabilities—noncurrent
 
2,585,906

Total lease liabilities
 
$
3,588,215


Supplemental cash flow information related to leases was as follows:
 
 
Three months ended
 
 
March 30, 2019
Cash paid for amounts included in the measurement of operating lease liabilities
 
$
298,000

Right-of-use assets obtained in exchange for new operating lease obligations
 
243,000

Other information related to leases was as follows:
 
 
 
March 30, 2019
Weighted Average Discount Rate—Operating Leases
 
6.11
%
Weighted Average Remaining Lease Term—Operating Leases (in years)
 
3.7


Prior to December 30, 2018, the Company accounted for its leases in accordance with Topic 840, Leases. At December 29, 2018, the Company was committed under operating leases for buildings, office space and equipment, which expired at various dates. As previously disclosed in our 2018 Annual Report and under previous lease guidance, future minimum lease payments under non-cancelable operating leases as of December 29, 2018 were as follows:
Fiscal year ending,
 
Amount
2019
 
$
1,210,000

2020
 
1,112,000

2021
 
921,000

2022
 
616,000

2023
 
201,000

Thereafter
 

Total
 
$
4,060,000

v3.19.1
SEGMENTS AND GEOGRAPHICAL INFORMATION
3 Months Ended
Mar. 30, 2019
Segment Reporting [Abstract]  
SEGMENTS AND GEOGRAPHICAL INFORMATION
SEGMENTS AND DISAGGREGATION OF REVENUE
The Company’s chief operating decision maker is its Chief Executive Officer. The Company has determined it has two reportable segments: Industrial, which includes the operations that develop and manufacture its reflective display products and virtual reality systems for test and simulation products, and Kopin, which includes the operations that develop and manufacture its other products.
Segment financial results were as follows:
 
Three months ended
Total Revenue (in thousands)
March 30, 2019
 
March 31, 2018
Kopin
$
3,456

 
$
2,997

Industrial
2,578

 
2,657

Eliminations
(491
)
 

Total
$
5,543

 
$
5,654

 
 
 
 
 
Three months ended
Total Intersegment Revenue (in thousands)
March 30, 2019
 
March 31, 2018
Kopin
$

 
$

Industrial
491

 

Total
$
491

 
$

 
 
 
 
 
Three months ended
Net Loss Attributable to Kopin (in thousands)
March 30, 2019
 
March 31, 2018
Kopin
$
(11,894
)
 
$
(5,990
)
Industrial
563

 
310

Total
$
(11,331
)
 
$
(5,536
)
 
 
 
 
Total Assets (in thousands)
March 30, 2019
 
December 29, 2018
Kopin
$
53,288

 
$
50,995

Industrial
8,139

 
8,554

Total
$
61,427

 
$
59,549


Total long-live assets by country at March 30, 2019 and December 29, 2018 were:
Total Long-lived Assets (in thousands)
March 30, 2019
 
December 29, 2018
U.S.
$
1,934

 
$
2,101

United Kingdom
196

 
197

China
61

 
251

Japan
43

 
50

Total
$
2,234

 
$
2,599

We disaggregate our revenue from contracts with customers by geographic location and by display application, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.
During the three months ended March 30, 2019 and March 31, 2018, the Company derived its sales from the following geographies:
 
Three months ended March 30, 2019
 
Kopin
 
Industrial
 
Total
(In thousands, except percentages)
Revenue
 
% of Total
 
Revenue
 
% of Total
 
Revenue
 
% of Total
United States
$
2,027

 
37
%
 
$
379

 
7
%
 
$
2,406

 
43
%
Other Americas
11

 

 
7

 

 
18

 

        Total Americas
2,038

 
37

 
386

 
7

 
2,424

 
43

Asia-Pacific
1,031

 
19

 
841

 
15

 
1,872

 
34

Europe
387

 
7

 
860

 
16

 
1,247

 
22

       Total Revenues
$
3,456

 
63
%
 
$
2,087

 
38
%
 
$
5,543

 
99
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended March 31, 2018
 
Kopin
 
Industrial
 
Total
(In thousands, except percentages)
Revenue
 
% of Total
 
Revenue
 
% of Total
 
Revenue
 
% of Total
United States
$
2,209

 
39
%
 
$
1,388

 
25
%
 
$
3,597

 
64
%
Other Americas
2

 

 
4

 

 
6

 

        Total Americas
2,211

 
39

 
1,392

 
25

 
3,603

 
64

Asia-Pacific
480

 
9

 
693

 
12

 
1,173

 
21

Europe
306

 
5

 
569

 
10

 
875

 
15

Other

 

 
3

 

 
3

 

       Total Revenues
$
2,997

 
53
%
 
$
2,657

 
47
%
 
$
5,654

 
100
%
During the three months ended March 30, 2019 and March 31, 2018, the Company derived its sales from the following display applications:
 
Three months ended March 30, 2019
 
Three months ended March 31, 2018
(In thousands)
Kopin
 
Industrial
 
Total
 
Kopin
 
Industrial
 
Total
Military
$
1,078

 
$
363

 
$
1,441

 
$
798

 
$
1,486

 
$
2,284

Industrial
936

 
1,567

 
2,503

 
748

 
1,011

 
1,759

Consumer
646

 

 
646

 
891

 

 
891

R&D
789

 
140

 
929

 
560

 
49

 
609

Other
7

 
17

 
24

 

 
111

 
111

Total Revenues
$
3,456

 
$
2,087

 
$
5,543

 
$
2,997

 
$
2,657

 
$
5,654

v3.19.1
LITIGATION
3 Months Ended
Mar. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
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.
BlueRadios, Inc. v. Kopin Corporation, Civil Action No. 16-02052-JLK (D. Col.):
On August 12, 2016, BlueRadios, Inc. ("BlueRadios") filed a complaint in the U.S. District Court for the District of Colorado, alleging that the Company breached a contract between it and BlueRadios concerning a joint venture between the Company and BlueRadios to design, develop and commercialize micro-display products with embedded wireless technology referred to as “Golden-i” breached the covenant of good faith and fair dealing associated with that contract, breached its fiduciary duty to BlueRadios, and misappropriated trade secrets owned by BlueRadios in violation of Colorado law (C.R.S. § 7-74-104(4)) and the Defend Trade Secrets Act (18 U.S.C. § 1836(b)(1)). BlueRadios further alleges that the Company was unjustly enriched by its alleged misconduct, BlueRadios is entitled to an accounting to determine the amount of profits obtained by the Company as a result of its alleged misconduct, and the inventorship on at least ten patents or patent applications owned by the Company need to be corrected to list BlueRadios’ employees as inventors and thereby list BlueRadios as co-assignees of the patents. BlueRadios seeks monetary, declaratory, and injunctive relief.
On October 11, 2016, the Company filed its Answer and Affirmative Defenses. The parties are in the midst of discovery, with the close of all discovery currently set for July 31, 2019. A trial date has not yet been set by the Court. The Company has not concluded a loss from this matter is probable; therefore, we have not recorded an accrual for litigation or claims related to this matter for the period ended March 30, 2019. The Company will continue to evaluate information as it becomes known and will record an estimate for losses at the time or times when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable.
v3.19.1
RELATED PARTY TRANSACTIONS
3 Months Ended
Mar. 30, 2019
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS
The Company may from time to time enter into agreements with stockholders, affiliates and other companies engaged in certain aspects of the display, electronics, optical and software industries as part of our business strategy. In addition, the wearable computing product market is relatively new and there may be other technologies the Company needs to purchase from affiliates to enhance its product offering.
During the three month periods ended March 30, 2019 and March 31, 2018, the Company had the following transactions with related parties:
 
Three months ended
 
March 30, 2019
 
March 31, 2018
 
Sales
 
Purchases
 
Sales
 
Purchases
Goertek
$

 
$
1,246,077

 
$

 
$
220,004

RealWear, Inc.
525,386

 

 
251,351

 

 
$
525,386

 
$
1,246,077

 
$
251,351

 
$
220,004

The Company had the following receivables, contract assets and payables with related parties:
 
March 30, 2019
 
December 29, 2018
 
Receivables
 
Contract assets
 
Payables
 
Receivables
 
Contract assets
 
Payables
Goertek
$

 
$

 
$
892,704

 
$

 
$

 
$
207,530

RealWear, Inc.
997,620

 
400,000

 

 
1,041,334

 
400,000

 

 
$
997,620

 
$
400,000

 
$
892,704

 
$
1,041,334

 
$
400,000

 
$
207,530

v3.19.1
ACCOUNTING STANDARDS (Policies)
3 Months Ended
Mar. 30, 2019
Leases [Abstract]  
Leases
Leases
The Company determines if an arrangement is a lease or contains an embedded lease at inception. For lease arrangements with both lease and non-lease components (e.g., common-area maintenance costs), the Company accounts for the non-lease components separately.
All of the Company's leases are operating leases. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of future lease payments over the lease term at the commencement date. The operating lease right-of-use assets also includes any initial direct costs and any lease payments made at or before the commencement date, and is reduced for any unrestricted incentives received at or before the commencement date.
For the majority of the Company's leases, the discount rate used to determine the present value of the lease payments is the Company's incremental borrowing rate at the lease commencement date, as the implicit rate is not readily determinable. The discount rate represents a risk-adjusted rate on a secured basis, and is the rate at which the Company would borrow funds to satisfy the scheduled lease liability payment streams commensurate with the lease term. On December 30, 2018, the discount rate used on existing leases at adoption was determined based on the remaining lease term using available data as of that date. For new or renewed leases starting in 2019, the discount rate is determined using available data at lease commencement and based on the lease term including any reasonably certain renewal periods.
Some of our leases include options to extend or terminate the lease. The Company includes these options in the recognition of the Company's ROU assets and lease liabilities when it is reasonably certain that the Company will exercise the option. In most cases, the Company has concluded that renewal and early termination options are not reasonably certain of being exercised by the Company (and thus not included in our ROU asset and lease liability) unless there is an economic, financial or business reason to do so. None of our leases include variable lease-related payments, such as escalation clauses based on the consumer price index ("CPI") rates or residual guarantees.
v3.19.1
CASH AND EQUIVALENTS AND MARKETABLE SECURITIES (Tables)
3 Months Ended
Mar. 30, 2019
Cash and Equivalents and Marketable Securities Disclosure [Abstract]  
Cash Cash Equivalents and Marketable Securities Table
Investments in available-for-sale marketable debt securities were as follows at March 30, 2019 and December 29, 2018:
 
Amortized Cost

Unrealized Losses

Fair Value
 
2019

2018

2019

2018

2019

2018
U.S. government and agency backed securities
$
11,307,655


$
13,064,418


$
(136,955
)

$
(253,495
)

$
11,170,700


$
12,810,923

Corporate debt
9,131,568

 
10,175,084

 
(13,351
)
 
(67,991
)
 
9,118,217

 
10,107,093

Total
$
20,439,223

 
$
23,239,502

 
$
(150,306
)
 
$
(321,486
)
 
$
20,288,917

 
$
22,918,016

Marketable Debt Securities
The contractual maturity of the Company’s marketable debt securities was as follows at March 30, 2019:
 
Less than
One year
 
One to
Five years
 
Total
U.S. government and agency backed securities
$
1,994,750

 
$
9,175,950

 
$
11,170,700

Corporate debt
2,671,796

 
6,446,421

 
9,118,217

Total
$
4,666,546

 
$
15,622,371

 
$
20,288,917

v3.19.1
FAIR VALUE MEASUREMENTS (Tables)
3 Months Ended
Mar. 30, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements of Financial Instruments
 
 
 
Fair Value Measurement March 30, 2019 Using:
 
Total
 
Level 1
 
Level 2
 
Level 3
Cash and Cash Equivalents
$
16,583,525

 
$
16,583,525

 
$

 
$

U.S. Government Securities
11,170,700

 

 
11,170,700

 

Corporate Debt
9,118,217

 

 
9,118,217

 

GCS Holdings
336,384

 
336,384

 

 

Equity Investments
5,650,099

 

 

 
5,650,099

 
$
42,858,925

 
$
16,919,909

 
$
20,288,917

 
$
5,650,099

 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurement December 29, 2018 Using:
 
Total
 
Level 1
 
Level 2
 
Level 3
Cash and Cash Equivalents
$
14,326,347

 
$
14,326,347

 
$

 
$

U.S. Government Securities
12,810,923

 

 
12,810,923

 

Corporate Debt
10,107,093

 

 
10,107,093

 

GCS Holdings
288,026

 
288,026

 

 

Equity Investments
5,565,499

 

 

 
5,565,499

 
$
43,097,888

 
$
14,614,373

 
$
22,918,016

 
$
5,565,499

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
Transfers between levels of the fair value hierarchy are reported at the beginning of the reporting period in which they occur. Changes in Level 3 investments were as follows:
 
December 29, 2018
 
Net unrealized gains
 
Purchases, issuances and settlements
 
Transfers in and or out of Level 3
 
March 30, 2019
Equity Investments
$
5,565,499

 
$
84,600

 
$

 
$

 
$
5,650,099

v3.19.1
INVENTORY (Tables)
3 Months Ended
Mar. 30, 2019
Inventory Disclosure [Abstract]  
Inventory Stated at the Lower of Cost or Market
and consist of the following at March 30, 2019 and December 29, 2018:
 
March 30, 2019
 
December 29, 2018
Raw materials
$
2,509,173

 
$
2,548,139

Work-in-process
1,208,874

 
1,526,552

Finished goods
456,303

 
722,547

 
$
4,174,350

 
$
4,797,238

v3.19.1
NET LOSS PER SHARE (Tables)
3 Months Ended
Mar. 30, 2019
Earnings Per Share [Abstract]  
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:
 
Three months ended
 
March 30, 2019
 
March 31, 2018
Non-vested restricted common stock
2,150,874

 
3,454,274

v3.19.1
STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION (Tables)
3 Months Ended
Mar. 30, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
NonVested Restricted Common Stock
 
Shares
 
Weighted
Average
Grant
Fair
Value
Balance, December 29, 2018
2,213,249

 
$
2.51

Granted
70,000

 
1.26

Forfeited
(122,375
)
 
3.06

Vested
(10,000
)
 
2.90

Balance, March 30, 2019
2,150,874

 
$
2.44

Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions
The value of restricted stock grants that vest based on market conditions is computed on the date of grant using the Monte Carlo model with the following assumptions:
 
For the three months ended March 30, 2019
Performance price target
$
5.25