Kopin Corporation (NASDAQ: KOPN) is a leading developer and provider of innovative wearable technologies and solutions for integration into head-worn computing and display systems to military, industrial and consumer customers.
Products:
Golden-i 3.8D is a reference design headset system for industrial applications. It has a powerful microprocessor, a display pod that provides an equivalent of a 15-inch screen, a 14-MP camera, 9-axis motion sensor to track head motion, and wireless connections via WiFi and Bluetooth. The Golden-i 3.8D offers hands-free operation with voice command and gesture control.
Displays As a leading microdisplay supplier, Kopin continues to set the standard for near-eye display performance and quality. Proven reliability and quality combined with a wide selection of displays make Kopin the right choice for your demanding applications.
ASIC Products Incorporating patent-pending DAC circuits, Kopin’s ASIC consume less than half the power of the conventional method.
Audio – Whisper Chip Designed to enhance the performance of existing audio systems and speech recognition engines, the Whisper chip allows the speaker’s voice to be clearly “heard” by the listener, whether a person or a machine — even in extreme noise environments. The Whisper chip incorporates Kopin’s Voice Extraction™ Technology that enables a truly hands-free voice interface.
Batteries Together, Kopin and Hitachi Maxell, Ltd. have entered into an agreement to produce and market new high-capacity lithium-ion batteries for use in head-worn wearable products based on silicon oxide with carbon (SiO-C) in the anode. The new technology doubles the capacity for a given battery volume compared to today’s conventional lithium-ion batteries.
Recent Events:
August 8, 2017. Corporate update and guidance: “We made very good progress in many areas in the second quarter, and we are actively working with multiple tier-one customers,” said Dr. John CC Fan, CEO of Kopin. “We believe the commercial AR/VR opportunities are beginning to materialize. We have experienced very strong interest for our 2k x 2k LightningTM OLED displays and related optics, and we have made great progress in production readiness of our Lightning OLED displays with our foundry partners BOE and OliGHTEK. In addition, the recent announcements by Google about its second-generation Glass intended for industrial applications has furthered the momentum of AR headsets. Kopin’s displays and optic products are designed for these rugged applications.
“We also had a solid quarter in our military business. The four major production programs in our military business, including the F-35 pilot helmets, the Family of Weapon Sights Programs (Individual and Crew), and our VR optical system for armor vehicle simulation and training headsets, are all ramping and should have a very significant impact on our revenues in the second half of 2017 and in 2018.
“In our consumer segment, we have completed shipment of the first generation of SOLOSTM, our health and fitness AR glasses. The initial customers have been passionate about SOLOS and we have received excellent feedback from them. We expect to have the second generation of SOLOS on sale by the end of 2017.
“Finally, we are making very good progress in our WhisperTM audio technology. In the second half of the year we expect to see the introduction of five new AR/VR headsets, of which two are Kopin systems and three are customer products. Of the five, four will feature our Whisper chip. In addition, we have made great progress in extending our Whisper technology from near-field to far-field applications. Early tests have shown the far field use matches the superior advantages in noise cancellation, voice quality, and speech recognition achieved in the near field application.
“On the strength of these new products and our current programs, we are optimistic about the revenue growth for the balance of the year and beyond. We anticipate revenues in the second half of 2017 will increase by approximately 70% as compared to the first half of 2017. Careful deployment of our financial resources, as always, remains a key priority. We ended the quarter with $85 million in cash and no debt, providing sufficient capital to monetize and commercialize our investments.
June 1, 2017. On stage at Augmented World Expo, the Company showcased a groundbreaking reference design, codenamed Elf VR, for a new Head-Mounted Display created with its partner Goertek Inc.
Kopin’s engineers created “LightningTM” OLED microdisplay panel, putting an end to the dreaded screen-door effect, with 2048 x 2048 resolution in each eye, more than three times the resolution of Oculus Rift or HTC Vive, and at an unbelievable pixel density of 2,940 pixels per inch, five times more than standard displays. Kopin first showcased its Lightning display at CES 2017, to overwhelming acclaim and a coveted CES Innovation Award. PC Magazine wrote that “the most advanced display I saw came from Kopin” and Anandtech said “Seeing is believing…I quite literally could not see anything resembling aliasing on the display even with a 10x loupe to try and look more closely.”
In addition, the panel runs at 120Hz refresh rate, 33% faster than what traditional HMDs offer – for reduced motion blur, latency, and flicker. As a result, nausea and fatigue are eliminated. Because Kopin’s panel is OLED-based and has integrated driver circuits, it requires much less power, battery life can be extended, and heat output is substantially reduced.
During the second quarter of 2017 the company had 9 patents granted and filed for 2 new applications. Overall KOPN has over 300 patents and patents pending, almost all of which are related to wearable applications.
About Kopin:
Kopin Corporation is a leading developer and provider of innovative wearable technologies and solutions for integration into head-worn computing and display systems to military, industrial and consumer customers. Kopin’s technology portfolio includes ultra-small displays, optics, speech enhancement technology, system and hands-free control software, low-power ASICs, and ergonomically designed smart headset reference systems. Kopin’s proprietary components and technology are protected by more than 300 global patents and patents pending.
Kopin leases a 74,000-square foot production facility in Westborough, Massachusetts, 10,000 square feet of which is contiguous environmentally controlled production clean rooms operated between Class 10 and Class 1,000 levels. They also lease a 5,800-square foot design facility in Scotts Valley, California for developing prototypes of products incorporating the CyberDisplay product and a 10,000-square foot facility in San Jose, California which houses their wearable computing Tech center and ASIC development.
Second Quarter Financial Results:
Total revenues for the second quarter ended July 1, 2017 were $5.9 million, compared with $4.4 million for the second quarter ended June 25, 2016.
Research and development (R&D) expenses for the second quarter of 2017 were $4.7 million compared to $4.1 million for the second quarter of 2016.
Selling, general and administrative (SG&A) expenses were $5.2 million for the second quarter of 2017 compared to $4.3 million for the second quarter of 2016, reflecting an increase in amortization of intangible assets, accrual of contingent earn out and professional fees. Included in SG&A is incremental SG&A expense of $0.5 million from the Company’s acquisition of NVIS, which was completed in the first quarter of 2017.
Net loss for the second quarter of 2017 was $7.3 million, or $0.10 per share, compared with net loss of $3.2 million, or $0.05 per share, for the second quarter of 2016. The second quarter of 2016 included a $7.7 million gain on the sale of their Korean subsidiary
As of July 1, 2017, Kopin had approximately $85 million in cash equivalents and marketable securities, and no long-term debt.
Stock influences and risk factors
Widespread acceptance of the company’s technology could be a catalyst;
They depend on third parties to provide integrated circuit chip sets;
The company a history of losses and has a significant accumulated deficit;
The market for wearable products may take longer to develop which may impact the ability to grow revenues.
Stock chart:
In intra-day trading on September 6, 2017, KOPN shares were at $3.98 (off 1%) with trading volume at 303K shares. The current RSI (14) is 56.26.
KOPN shares have crossed their 50-day and 200-day moving averages of $3.56 and $3.81 respectively, in a bullish manner. KOPN shares have risen 17% in 2017.
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