BUSINESS COMBINATION (Tables)

3 Months Ended

Apr. 01, 2017

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The allocation of the purchase price is as follows:




Cash and marketable securities	$	2,600
Accounts receivable	490,700
Inventory	768,400
Other identifiable assets	46,800
Order backlog	840,000
Customer relationships	1,000,000
Developed technology	460,000
Trademark portfolio	160,000
Current liabilities	(480,500		)
Net deferred tax liabilities	(1,084,000		)
Goodwill	1,477,000
Total	$	3,681,000

Schedule of Goodwill [Table Text Block]

The Company’s goodwill balance is as follows:



	Kopin		Industrial		Total
Balance, December 31, 2016	$	844,023	$	—	$	844,023
March 2017 acquisition	—		1,477,000		1,477,000
Change due to exchange rate fluctuations	5,925		—		5,925
Balance, April 1, 2017	$	849,948	$	1,477,000	$	2,326,948

The Company’s goodwill balance is as follows:



	Kopin		Industrial		Total
Balance, December 31, 2016	$	844,023	$	—	$	844,023
March 2017 acquisition	—		1,477,000		1,477,000
Change due to exchange rate fluctuations	5,925		—		5,925
Balance, April 1, 2017	$	849,948	$	1,477,000	$	2,326,948

The identified intangible assets will be amortized on a straight-line basis over the following lives, in years:



Order backlog	1
Customer relationships	2
Developed technology	2
Trademark portfolio	2

The Company recognized $0.2 million in amortization for the three months ended April 1, 2017 related to its intangible assets. In conjunction with the acquisition the Company recorded deferred tax liabilities of approximately $1.1 million associated with the future non-deductible amortization of the intangible assets. These deferred tax liabilities can be used to offset the Company’s net deferred tax assets in future years. The Company reduced the valuation allowance on its net deferred tax assets in the amount of $1.1 million and such reduction was recognized as a benefit for income taxes for the three month period ended April 1, 2017. Acquisition expenses were approximately $0.2 million and are recorded in selling, general and administration expenses.

The following unaudited supplemental pro forma disclosures are provided for the three month periods ended April 1, 2017 and March 26, 2016, assuming the acquisition of the company had occurred as of December 26, 2015. All intercompany transactions have been eliminated.



	Three months ended
	April 1, 2017			March 26, 2016
Revenues	$	4,982,000		$	6,374,000
Net loss	(8,553,000		)	(7,312,000		)

For the three month period ended April 1, 2017 the revenues and net loss from the acquired company were $396,000 and $78,000, respectively.

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

The identified intangible assets will be amortized on a straight-line basis over the following lives, in years:



Order backlog	1
Customer relationships	2
Developed technology	2
Trademark portfolio	2