Kopin Corporation (NASDAQ:KOPN), a leading developer of innovative wearable computing technologies and solutions, today provided an update on its business initiatives and reported financial results for the third quarter ended September 24, 2016.

“The enthusiasm and excitement around wearables continues to grow and Kopin made further progress in the third quarter testing and evaluating opportunities with potential partners,” said Dr. John C.C. Fan, Kopin’s President and CEO. “We are confident our displays, optics and Whisper™ Chip technology will be key components in many upcoming products from global technology companies. On my recent trip to Asia to further many of these opportunities, it became clear that Asian companies are ahead in monetizing augmented reality (AR) and virtual reality (VR), and many are close to commercial manufacturing. It also confirmed that the Asian view around these emerging technologies is more closely aligned with Kopin’s thoughts: AR/VR should be used for mobile applications, with interface to a smart phone and not a stationary PC; the headsets should be small, light weight and comfortable to wear but still provide an immersive experience; and the devices should be voice centric and not touch centric. With this similar outlook and the technology to power it, Kopin is a highly respected partner in Asia and would place Kopin products across different verticals and companies throughout Asia.

“In fact, we are already seeing this view played out by Softbank, which has recently exhibited our Solos™ wearables in Japan. Solos, our headset targeted to the elite cycling community, features Kopin’s unique Pupil Optics and micro display. Solos uses our world’s smallest heads-up display module and pairs it with our best in class performance tracking, precision training tools and other useful features. The response from our Kickstarter campaign was very strong, and we are exploring refinements to target Solos at other markets such as runners.

“Even without these developments utilizing our new technologies, our core business is on track for significant revenue growth next year. Production is under way for the displays Kopin provides to the world’s most advanced augmented reality pilot helmet used in the Joint Strike Fighter (F-35). The program is progressing in line with typical new programs, and we look for revenues from this opportunity to increase in 2017. We received additional orders for shipments under the Family of Weapon Sight – I (FWS-I) program, which is an integrated night vision targeting solution. These shipments are part of the Low Rate Initial Production (LRIP) phase of the program. We also expect to receive development contracts by year end for the companion program to the FWS-I, the Family of Weapon Sight – C (FWS-C) and we look for revenues to grow throughout 2017 from both programs.

“Another opportunity is the new Scott Sight for firefighters introduced by Scott Safety, a division of Tyco. Kopin is providing the display module for the world’s first in-mask thermal imaging camera system that provides firefighters improved visibility in smoke-filled environments. Currently firefighters carry a thermal imaging camera in their hands which impedes their ability to perform. Popular Science just awarded the Scott Sight a “Best of What’s New” award due to the ‘situational intelligence’ the headset provides to firefighters. We look for strong revenue growth in this segment in 2017. One can expect new applications for Kopin’s technology in the health and safety fields, where the use of AR can enhance situational awareness and productivity. VR is also helping to drive our sport drone business, primarily out of China, and we are on track for that business to grow 30-40% this year, increasing again next year.

“In the third quarter of 2016 we had 11 new patents granted and 11 new applications. Our portfolio of over 300 patents and patent pendings covers various wearables technologies and designs and helps ensure Kopin will be a leading provider for mobile AR/VR markets. With over $84 million in cash and equivalents and marketable securities at the end of the third quarter of 2016 we have the financial resources to fund our current plans and the opportunities ahead with partners. We are very encouraged by our progress this year and are very excited to see these achievements monetized in 2017,” concluded Dr. Fan.

We expect exciting developments in the next six to nine months, with major announcements in the coming CES in January, 2017 and Mobile World Congress in March, 2017 and we hope you will have an opportunity to visit us at these major shows.

Third Quarter Financial Results

Total revenues for the third quarter ended September 24, 2016 were $5.8 million, compared with $8.0 million for the third quarter ended September 26, 2015. Sales of products for wearable applications were $1.5 million for the third quarter of 2016 as compared to $3.5 million in the third quarter of 2015. Included in the third quarter of 2015 revenues was $1.8 million related to renegotiated contract terms due to the customer’s lowered forecasted program volumes.

Research and development (R&D) expenses for the third quarter of 2016 were $4.1 million compared with $4.0 million for the third quarter of 2015.

Selling, general and administrative (SG&A) expenses were $4.0 million for the third quarter of 2016 as compared with approximately $4.6 million for the same period in 2015.

Net loss attributable to the controlling interest for the third quarter of 2016 was $7.8 million, or $0.12 per share, compared with net loss of $4.7 million, or $0.07 per share, for the third quarter of 2015.

We have maintained our strong financial position. Net cash used in operating activities for the nine months ended September 24, 2016 was approximately $19.4 million. Kopin’s cash and equivalents and marketable securities were approximately $84.3 million at September 24, 2016 as compared to $80.7 million at December 26, 2015 and we have no long-term debt.

All amounts above are estimates and readers should refer to our Form 10-Q for the quarter ended September 24, 2016 for final disposition.

Financial Results Conference Call

In conjunction with its third quarter 2016 financial results, Kopin will host a teleconference call for investors and analysts at 8:30 a.m. ET today. To participate, please dial (877) 709-8150 (U.S. and Canada) or (201) 689-8354 (International). The call will also be available as a live and archived audio webcast on the “Investors” section of the Kopin website, www.kopin.com.

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. For more information, please visit Kopin’s website at www.kopin.com.

Kopin, Whisper, and Solos are trademarks of Kopin Corporation.