Good afternoon and welcome to Kopin Corporation's Fourth Quarter 2015 Conference Call. Today's call is being recorded for Internet replay. You may access an archived version of the call on Kopin’s website at www.kopin.com. With us today from the Company are Chairman and Chief Executive Officer, Dr. John C.C. Fan; and Chief Financial Officer, Mr. Richard Sneider. Please go ahead, Mr. Sneider.

Welcome everyone and thank you for joining us this afternoon. John will begin today's call with a discussion of our strategy, technology and markets. I will go through the 2015 fiscal fourth quarter and year end results at a high level, John will conclude our prepared remarks and then we'll be happy to take your questions. I would like to remind everyone that during today's call, taking place on Thursday, March 03, 2016, we will make some forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on the Company’s current expectations, projections, beliefs and estimates and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Potential risks include, but are not limited to, demand for our products, operating results of our subsidiaries, market conditions and other factors discussed in our most recent report on Form 10-K and other documents filed with the Securities and Exchange Commission. The Company undertakes no obligation to update the forward-looking statements made during today's call. And with that, I'll turn it over to John.

Good afternoon everyone and thank you for joining our call this afternoon. Let me start by saying that, we had a very successful 2015. And exceeded both our technical and financial goals that we outlined at the beginning of 2015, on technology and product developments and made good progress and the results of development assets will demonstrate very successfully in 2016 CES in January. In 2015, we reached agreements with two tier-1 companies in the enterprise and consumer markets bringing the total to five tier-1 companies offering products with Kopin size. During the year, we just started beginning shipping the asset for heavy enterprise applications which has been well received in Japan. We also started initial shipments to a tier-1 customer for health and fitness and this product was introduced at CES this January. Adding these two companies to Recon not accountable with Intel, Motorola and Google who was again a 10% customer in 2015 for us. We actually have a industry-leading customer base on which to grow. In the military, we were designing with the F-35 fighter jet helmet as a source of – supplier that shipment to ramp in 2016 and continue for many years. This helmet, a high performance VR helmets and in fact, we are supplying our displays to close to 100% works on all military avionic helmets in the world other than Russia and China. We also had a solid year in demand for our Thermal Weapon Sights as this TWS program is transitioning to the FWS. Here F means Family of Weapon Sights. This is a good time to discuss the general state of AR and VR and to highlight our current strategy. We have been a strong believer that AR and VR market will be huge. We also believe that ultimate wearables will…

Thank you, John. Beginning with the results for the quarter, total revenues for the fourth quarter of 2015 were $4.6 million compared with $10.6 million for the fourth quarter of 2014. The decrease in quarter year-over-year was primarily driven by anticipated decline in sales of our products used in thermal weapon sights. Cost of goods sold for the fourth quarter was 104% of product revenues compared with 69.1% for the fourth quarter of last year. The decline was due to the fact that military products have higher gross margins as compared to our other products and overall lower volumes resulted in under absorption of fixed cost. R&D expenses in the fourth quarter of 2015 were $3.9 million compared to $5.7 million in the fourth quarter of 2014. The decline in R&D expense year-over-year was primarily driven by lower funded R&D expense as customers move into production phase. SG&A expenses were $4 million for the fourth quarter of 2015, compared to $5 million in the fourth quarter of 2014. The decrease in the fourth quarter of 2015 as compared to the same quarter in 2014 was primarily due to a decrease in stock-based compensation expense and warranty costs. Other income and expense was income of $895,000 for the fourth quarter of 2015 as compared with $600,000 for the fourth quarter of 2014. The fourth quarter of 2015 included approximately $1.2 million from the sale of an investment. The fourth quarter of 2015 also includes approximately $600,000 of foreign currency losses as compared with approximately $300,000 of foreign currency gain in 2014. Turning to the bottom-line, our net loss for the quarter was approximately $7 million or $0.11 per share, compared with a net loss of $5.3 million or $0.08 per share for the fourth quarter of 2014. Turning to results for…

So, we – thank you very much, Rich. We are now ready for Q&A.

[Operator Instructions] Our first question is from Matt Robison of Wunderlich Securities. Please go ahead.

Okay, thanks for taking the question. John, on the SiMax and Whisper, which one is more of a gating item for – which one is going to be in production first do you think?

The question is – Whisper is actually ready for production in the summer, that part is basically done. The SiMax, it depends on the certification, as you know, leaking battery certification is because it’s wearable especially they are challenging. So, production that goes, so and that is expected to be done this year.

So, but that’s a critical – that’s in a critical path for Solos, isn’t it?

Well, of course, Solos are planning to use that battery, but we will obviously have back up in that.

Okay.

To make sure that mission introduction is starting in this year.

Rich, I heard the explanation for the funded R&D decline, I think a level you haven’t seen some – I think 2013, is there – are the necessarily you have already the military projects like providing in that kind of revenue later this year?

So, the FWS-I which was individual, we have been receiving some funding already and there will be some more next year. But that goes into production, low rate production, they call it LRIP in the second half of this year. The FWS-C we expect the award – we are hoping the award in the second half of the year that will go through two years of development. So there will development funds associated with that for two years and then it will go to production.

Do you have any more commercial activity in the pipeline that might boost that revenue?

We have a number of commercial opportunities going on right now. But as John said, a lot of our technology development, the heavy lifting has been complete, so it’s really working through the customer.

Yes, we have a very, very active designing activity right now.

Okay, and you have mentioned the F-35 $4.5 million a year, I didn’t catch when that would start?

So, we would expect that over the next couple of years to be in the range of $4 million to $5 million, not $4.5 million, but $4 million to $5 million. And then it starts ramping up and by 2020, you are in excess of $10 million a year.

I’m sorry I heard that wrong. So, two years from now for it to get to the $4 million to $5 million level?

No, no, we would expect $4 million to $5 million level this year and then next year ramping up a little bit more then another final year ramp and then by 2020 you are over $10 million a year.

Okay and can you tell us what the operating cash flow and CapEx were during the fourth quarter?

Operating cash flow, net cash provided by operating activities was a use of $6.8 million and CapEx was di minimus, it’s about $129,000.

Now that – that level of operating cash slice is a bit more severe than you’ve had in quite a while. Anything particularly noteworthy there?

No, I mean, I think, obviously it’s reflective of the decline in the thermal weapon sight sales in the fourth quarter. So, the fourth quarter we burn more cash. We will be running at a rate of about $4 million to $5 million a quarter and the fourth quarter came in at to over $7 million, so, approximately $7 million. So, and that was really just a decline in the sales.

And so, to the bottoms-up on the interest and other income almost $900,000 that was – can you kind of breakdown that interest versus Forex and gain for the quarter?

For the quarter, - let me tell you the – actually I have that in my script, I just put away, so I have that – let me get back to you in a second, Matt, I don’t know do you have any other questions.

I’ll let somebody else ask a question, I’ll come back. Thanks.

[Operator Instructions] And our next question is from Matt Robison from Wunderlich. Please go ahead.

First of all, John, you said it’s essentially ready now, but you said, you don’t expect that to be available, I guess, for another three months. Is that right?

Matt, which one you want to talk about, the Whisper?

Yes.

The Whisper is a chip that’s being designing and people going to – will help prepare audio write it down using Whisper.

Okay, so the silicon is ready now, it’s now getting fully functional silicon now?

Yes, it’s fully functional, so the final chip is ready.

Okay, you are just waiting for your customer volume and then the – at CES, it seemed like Solos was waiting for Whisper and/or SiMax and you are talking about back-up and to the battery. So…

And at CES, Whisper chip was not fully certified, it is now remaining well and then the battery offer – CES we were also waiting for the battery to be certified and that’s not certified yet.

So, what’s holding up? If Whisper is ready, then you are waiting for the battery, that’s what you are waiting for Solos now?

Well, Solos we have - obviously have all of the things that goes through, but even the battery we have a back up trying to fine, so we are…

Yes, it just seems like it was pretty close to being ready at the first of the year.

Yes, the Hitachi Maxwell guys which was into with that yet he was raising about the battery, but everything else, everything have – goes through certification.

Thanks, for giving the time, Rich?

Yes, for the fourth quarter, other income was $895,000 composed of a $1.2 million gain from the sale of an investment. $600,000 foreign currency loss and the difference is interest income.

Thanks a lot.

And if there are no further questions, I would like to turn it back over to management for any closing remarks.

Yes, we are very excited by our progress in 2015. The agreements we have reached with Tier-1 wearable customers around the globe are on track. Now our cash position is even better than we planned. We are now working very hard on production introductions and designing. These are out top objectives this year and I hope to talk to you guys soon. Thank you.

Thank you. This concludes today's teleconference. You may disconnect your lines and have a wonderful evening.