UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission file number 0-19882 KOPIN CORPORATION (Exact name of registrant as specified in its charter) Delaware 04-2833935 State or other jurisdiction o ...

Financial Data and Key Metrics Changes - Total revenues for Q3 2023 were $10.6 million, a 10% decrease from $11.7 million in Q3 2022 [44] - Net loss attributable to the company was approximately $2.5 million or $0.02 per share, compared to a loss of $6.1 million or $0.07 per share in Q3 2022, indicating improved financial performance [46] - Funded R&D revenues increased by 47% year-over-year to $5.1 million, driven by a $1.9 million order related to a thermal weapon site program [26] Business Line Data and Key Metrics Changes - Product revenues decreased to $5.5 million in Q3 2023 from $8.3 million in Q3 2022, primarily due to a significant decline in industrial revenues, which fell by 82% [44] - The company booked follow-on orders totaling approximately $12.8 million in Q3 2023, resulting in a book-to-bill ratio of approximately 2:1, marking a record order level for the company over the last decade [18] Market Data and Key Metrics Changes - Defense revenues decreased by $800,000 or 14% year-over-year, attributed to the conclusion of current purchase orders and the beginning of new ones [26] - The company noted continued weakness in the 3D automated test market, particularly in China, impacting industrial revenue [37] Company Strategy and Development Direction - The company aims to return operations to cash break-even levels as part of its transformation plan, focusing on improving margins and controlling costs [25] - A strategic partnership with MIT's CSAIL lab has been established to enhance software capabilities, which is critical for the next stage of growth [20] - The company is focused on adapting technology to users rather than forcing users to adapt to technology, which is a shift in its operational philosophy [66] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting strong customer relationships and a focus on moving up the value chain [47] - The company anticipates additional orders for its thermal weapons site program and is preparing for potential reconfiguration of production lines to meet increased demand [53][54] - Management acknowledged the challenges of adapting display technology to individual user needs, emphasizing the importance of sensor integration to reduce motion sickness in AR/VR applications [56] Other Important Information - The company has no long-term debt and reported cash and marketable securities of approximately $21.7 million as of September 30, 2023, up from $12.6 million at the end of 2022 [28] - The company is working on a new website and enhancing its brand and marketing efforts [29] Q&A Session Summary Question: How will the downtime for reconfiguration affect revenue? - Management indicated that downtime may lead to some lumpiness in revenue as production is optimized, but no significant capital expense for machinery is expected [54] Question: Can you elaborate on the new display architecture? - Management explained that the new neural display incorporates sensors to monitor user feedback, aiming to address motion sickness in AR/VR devices [56] Question: What is the timeline for getting the new display technology into the market? - Management deferred providing a specific timeline but indicated ongoing partnerships and development efforts to expedite the process [70] Question: How is the company managing increased inventories? - Management confirmed that inventory levels are up in anticipation of projected growth and to mitigate lead time issues for necessary components [85]

Company Participants Matt Sheerin - Stifel Glenn Mattson - Ladenburg Thalmann Kevin Dede - H.C. Wainwright At this time, I'd like to turn the conference call over to Clint Kalinin [ph], Investor Relations for Kopin. Please go ahead. 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 annual report on Form 10-K and other documents filed with the Securities and Exchange Commission. Alt ...

Financial Data and Key Metrics Changes - Product revenues for Q1 2023 were $7.7 million, a 17.6% increase from $6.5 million in Q1 2022, driven by a 35% increase in defense revenues, partially offset by a 39% decrease in industrial revenues [41] - Total revenues for Q1 2023 were $10.8 million, down 7% from $11.6 million in the prior year [42] - Net loss for Q1 2023 was approximately $2.6 million or $0.03 per share, compared to a net loss of $1.4 million or $0.04 per share in Q1 2022 [19] Business Line Data and Key Metrics Changes - Funded R&D revenues decreased to $2.9 million in Q1 2023 from $4.9 million in Q1 2022, a decline of 41% [15] - R&D expenses for Q1 2023 were $2.3 million, down from $5.4 million in Q1 2022, with funded R&D expenses at $1.6 million compared to $3.4 million in the prior year [43] Market Data and Key Metrics Changes - The global microdisplay market is projected to grow over 20% annually for the next five to seven years, indicating strong demand for microdisplay technologies across various industries [6] Company Strategy and Development Direction - The company aims to improve product quality, achieving on-time delivery rates in the high-80s to low-90s percentile, with expectations to maintain rates above 90% after new equipment installation [8] - Kopin is focusing on strategic initiatives such as the Integrated Visual Augmentation System (IVAS) program, which has a current funding of $2.5 billion and long-term plans for $21 billion [12] - The company is transitioning R&D efforts to projects with higher success probabilities and is rationalizing expenses to improve profitability [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's order book and the potential for sequential growth in Q2 2023, highlighting strong customer partnerships [71] - The company is confident in its ability to improve margins and cash flow through quality improvements and strategic investments [20] Other Important Information - The company raised approximately $21.5 million through an equity offering, providing sufficient cash for necessary investments [46] - The PPAP award for an armored vehicle program represents a significant opportunity, potentially exceeding $100 million in lifetime revenue [10] Q&A Session Summary Question: Can you elaborate on the armored vehicle order and its revenue potential? - The program is expected to generate over $100 million in revenue over five to seven years, with several products integrated into each vehicle [23] Question: What is the timeline for the micro LED product release and its significance? - There is significant demand for micro LED products, particularly in consumer applications, with expectations for revenue growth in 2024 [51] Question: Can you provide insights on the sustainability of gross margins post-retooling? - Management anticipates continued margin improvements, targeting an additional 5 to 10 basis points of improvement this year [53] Question: What are the emerging market opportunities in healthcare applications? - The company is developing a surgical visualization product, with strong demand expected to generate revenue in 2024 [65] Question: How does the relationship with Lightning Silicon impact future strategies? - The partnership aims to develop a consumer fab strategy, transitioning to 12-inch wafers to enhance cost and volume efficiency [67]

WASHINGTON, DC 20549 UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-19882 KOPIN CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware 04-2833935 State or other jurisdiction of incorporation or o ...

Kopin Corporation (NASDAQ:KOPN) Q4 2022 Earnings Conference Call March 14, 2023 8:30 AM ET Company Participants Brian Prenoveau - Investor Relations Richard Sneider - Treasurer and Chief Financial Officer Michael Murray - President and Chief Executive Officer Conference Call Participants Glenn Mattson - Ladenburg Kevin Dede - H.C. Wainwright Operator Good morning everyone, and welcome to the Kopin Corporation's Fourth Quarter and Full Year 2022 Earnings Call. Please note that this event is being recorded. A ...

Kopin Corporation (NASDAQ:KOPN) Q3 2022 Earnings Conference Call November 1, 2022 8:30 AM ET Company Participants Richard Sneider - Treasurer & Chief Financial Officer John Fan - Chairman Michael Murray - President & Chief Executive Officer Conference Call Participants Glenn Mattson - Ladenburg Kevin Dede - H.C. Wainwright Operator Good day, ladies and gentlemen and welcome to the Kopin's Third Quarter 2022 Earnings Call. Today's conference is being recorded. At this time, IÂ'd like to turn the conference o ...

Kopin Corporation (NASDAQ:KOPN) Q2 2022 Earnings Conference Call August 2, 2022 8:30 AM ET Corporate Participants John Fan - Chief Executive Officer Richard Sneider - Treasurer and Chief Financial Officer Conference Call Participants Glenn Mattson – Ladenburg Thalmann Kevin Dede – H.C. Wainwright & Co. Operator Welcome to Kopin's Second Quarter 2022 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Rich Sneider, Chief Financial Officer. Please go ahead. Richa ...

Call Start: 08:30 January 1, 0000 8:39 AM ET Kopin Corporation (NASDAQ:KOPN) Q1 2022 Earnings Conference Call May 3, 2022, 8:30 AM ET Company Participants John Fan – Chief Executive Officer Richard Sneider – Treasurer and Chief Financial Officer Conference Call Participants Glenn Mattson – Ladenburg Thalmann Kevin Dede – H.C. Wainwright & Co. Operator Ladies and gentlemen, please standby. We're about to begin. Good day and welcome to Kopin's first-quarter 2022 earnings call. Today's conference is being reco ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) Kopin develops high-resolution microdisplays and components for defense, enterprise, industrial, and consumer AR/VR applications - Kopin is a developer and provider of high-resolution microdisplays and components for defense, enterprise, industrial, and consumer products, including AR and VR systems[14](index=14&type=chunk) - The company's core display technologies include transmissive AMLCDs (CyberDisplay®), reflective LCOS displays (Time Domain Imaging), and emissive OLED displays (Lightning® displays)[15](index=15&type=chunk)[16](index=16&type=chunk) Significant Customer Sales as a Percentage of Total Revenue | Customer | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Defense Customers in Total** | 40% | 50% | 30% | | DRS Network & Imaging Systems, LLC | 31% | 35% | 17% | | Collins Aerospace | 30% | 27% | * | | RealWear, Inc. | * | * | 20% | | **Funded Research and Development Contracts** | 32% | 25% | 17% | - Kopin's strategy involves leveraging funded R&D from U.S. defense programs to develop technology that can be adapted for industrial, enterprise, and consumer applications[48](index=48&type=chunk) - The company faces significant competition from large Asian-based electronics companies such as Sony, Samsung, and LG Display, as well as specialized microdisplay manufacturers like eMAGIN[64](index=64&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks including historical losses, negative cash flow, supply chain issues, fixed-price defense contracts, and reliance on U.S. government programs - The company has a history of significant net operating losses, with an accumulated deficit of **$319.1 million** as of December 25, 2021, and has experienced negative cash flow from operations in fiscal years 2021, 2020, and 2019[97](index=97&type=chunk) - Kopin is exposed to a global shortage of critical semiconductor components and other raw materials, which could prevent product manufacturing and sales. The company's reliance on a select number of third-party suppliers, particularly for defense products, heightens this risk[98](index=98&type=chunk) - A significant portion of revenue is derived from U.S. defense programs like the Family Weapon Sight (FWS) and the F-35 Joint Strike Fighter. These revenues are at risk due to potential program cancellations, funding changes, or loss of contracts to competitors[105](index=105&type=chunk) - Most defense sales are on a fixed-price basis, exposing the company to potential losses from cost overruns, especially given rising raw material and labor costs due to inflation[99](index=99&type=chunk) - The company relies on a Taiwanese foundry for defense display integrated circuits and Chinese foundries for OLED displays. Any disruption to these foundries due to political instability, natural disasters, or other factors could severely limit manufacturing capabilities[119](index=119&type=chunk)[120](index=120&type=chunk) [Properties](index=29&type=section&id=Item%202.%20Properties) Kopin leases all its facilities, including a 74,000 sq. ft. production facility in Westborough, MA, and other international locations - The company leases a **74,000 sq. ft.** facility in Westborough, MA, which includes **10,000 sq. ft.** of clean rooms[157](index=157&type=chunk) - Subsidiaries lease facilities in Reston, VA (NVIS, **6,100 sq. ft.**) and Dalgety Bay, Scotland (FDD, **20,000 sq. ft.**)[158](index=158&type=chunk) [Legal Proceedings](index=29&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in a legal dispute with BlueRadios, Inc. concerning breach of contract and trade secret misappropriation related to a joint venture - BlueRadios, Inc. filed a complaint against Kopin in 2016 alleging breach of contract, misappropriation of trade secrets, and other claims related to a joint venture[161](index=161&type=chunk) - As of December 25, 2021, the company has not recorded a litigation accrual, as it has not determined that a loss is probable[162](index=162&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=30&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Kopin's common stock trades on Nasdaq, and the company does not anticipate paying cash dividends, preferring to retain earnings for business development - The company's common stock trades on the Nasdaq Capital Market under the symbol **KOPN**[165](index=165&type=chunk) - Kopin has not paid cash dividends and does not expect to in the foreseeable future, intending to retain earnings for business development[166](index=166&type=chunk) Equity Compensation Plan Information (as of Dec 25, 2021) | Plan Category | Securities to be issued upon exercise | Weighted-average exercise price | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 2,077,592 | $2.78 | 1,795,311 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Total revenues increased by 13.8% in fiscal 2021, driven by Industrial/Enterprise and R&D growth, but net loss widened due to higher operating expenses and negative operating cash flow [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Total revenues increased to $45.7 million in fiscal 2021, driven by Industrial/Enterprise and R&D, while operating expenses rose significantly, leading to a $13.8 million operating loss Revenues by Application (In thousands) | Category | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Defense | $18,180 | $20,231 | $8,729 | | Industrial/Enterprise | $9,710 | $6,882 | $9,717 | | Consumer | $1,871 | $852 | $1,777 | | Research and Development | $14,669 | $10,123 | $4,983 | | License and royalties | $1,115 | $1,487 | $4,252 | | **Total Revenues** | **$45,666** | **$40,128** | **$29,519** | - FY2021 revenue from defense customers decreased due to lower shipments for the Joint Strike Fighter program, while Industrial/Enterprise revenue increased from higher sales for 3D metrology equipment and industrial headsets[199](index=199&type=chunk)[200](index=200&type=chunk) Cost of Product Revenues Analysis | (In thousands, except percentages) | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Cost of product revenue | $25,052 | $21,398 | $20,902 | | Cost of product revenues as a % of net product revenues | 83.8% | 75.0% | 103.0% | - Cost of product revenues as a percentage of sales increased in 2021 compared to 2020, primarily due to lower production volumes in Q2 and Q3 of 2021 related to process changes for FWS-I products[213](index=213&type=chunk) Research and Development Expenses (In thousands) | Category | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Funded | $9,976 | $7,746 | $4,216 | | Internal | $6,312 | $3,924 | $9,133 | | **Total** | **$16,288** | **$11,670** | **$13,349** | - Total R&D expenses increased in 2021 due to a higher number of defense-related contracts (Funded R&D) and increased spending on OLED development (Internal R&D)[217](index=217&type=chunk) - Selling, general and administrative (SG&A) expenses increased to **$18.1 million** in 2021 from **$11.8 million** in 2020, primarily due to a **$3.1 million** increase in non-cash stock-based compensation and a **$1.4 million** increase in compensation and benefits[220](index=220&type=chunk)[221](index=221&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and equivalents increased to $29.3 million at year-end 2021, primarily from equity sales, offsetting negative operating cash flow, with management projecting sufficient liquidity through Q1 2023 - Cash, cash equivalents, and marketable securities increased to **$29.3 million** at year-end 2021 from **$20.7 million** at year-end 2020[233](index=233&type=chunk) - The company raised approximately **$21.1 million** net proceeds from the sale of common stock in fiscal 2021 through its At-The-Market (ATM) equity offering programs[233](index=233&type=chunk)[234](index=234&type=chunk) - Net cash used in operating activities was **$10.7 million** in 2021, compared to **$4.4 million** in 2020 and **$21.0 million** in 2019[243](index=243&type=chunk) - Management estimates sufficient liquidity to fund operations at least through Q1 2023, but may consider raising additional capital if market conditions are favorable[243](index=243&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate and foreign currency risks but does not use hedging instruments, deeming the potential impact immaterial - The company's primary market risks are related to interest rate fluctuations on its investment portfolio and foreign currency exchange rate changes from its international operations[247](index=247&type=chunk) - Kopin does not currently use hedging instruments to manage its foreign currency exchange rate risk[247](index=247&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of December 25, 2021 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 25, 2021[250](index=250&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 25, 2021, based on the COSO framework[252](index=252&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Principal Accountant Fees](index=44&type=section&id=Items%2010-14) Information on directors, executive officers, corporate governance, compensation, security ownership, and accountant fees is incorporated by reference from the 2022 Proxy Statement - Information regarding Directors, Executive Officers, Corporate Governance (Item 10), Executive Compensation (Item 11), Security Ownership (Item 12), Certain Relationships and Related Transactions (Item 13), and Principal Accountant Fees (Item 14) is incorporated by reference from the company's 2022 Proxy Statement[256](index=256&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=45&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section presents the consolidated financial statements, notes, and the independent auditor's report, which identifies revenue recognition for R&D contracts as a critical audit matter - The independent auditor, RSM US LLP, issued an unqualified opinion on the consolidated financial statements[269](index=269&type=chunk) - The auditor identified revenue recognition for research and development contracts as a Critical Audit Matter, due to the significant management judgment required to estimate total contract costs, which is a key input for the cost-to-cost recognition method[274](index=274&type=chunk)[275](index=275&type=chunk) [Consolidated Financial Statements](index=47&type=section&id=Consolidated%20Financial%20Statements) The financial statements show total assets of $63.0 million, a net loss of $13.4 million, and net cash used in operations of $10.7 million for fiscal year 2021 Key Financial Statement Data (Fiscal Year 2021) | Metric | Amount (in millions) | | :--- | :--- | | Total Revenues | $45.7 | | Loss from Operations | $(13.8) | | Net Loss Attributable to Kopin | $(13.4) | | Net Loss Per Share | $(0.15) | | Total Assets (at year-end) | $63.0 | | Total Liabilities (at year-end) | $23.4 | | Total Stockholders' Equity (at year-end) | $39.6 | | Net Cash Used in Operating Activities | $(10.7) | | Net Cash Provided by Investing Activities | $0.1 | | Net Cash Provided by Financing Activities | $20.4 | [Notes to Consolidated Financial Statements](index=53&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, significant customer concentrations, substantial federal net operating loss carryforwards, and related party transactions - In fiscal 2021, **69%** of revenue was recognized over time, primarily from government contracts, while **31%** was recognized at a point in time[311](index=311&type=chunk) - As of December 25, 2021, the company had federal net operating loss carryforwards of **$160.3 million** expiring between 2021-2038 and **$60.1 million** with an unlimited carryover period. A full valuation allowance has been recorded against these deferred tax assets[403](index=403&type=chunk) - In 2019, the company recorded a **$5.2 million** impairment charge, reducing its investment in RealWear, Inc. to zero[377](index=377&type=chunk)[422](index=422&type=chunk) - The company's CEO, Dr. John C.C. Fan, and his family members collectively hold a significant ownership interest in Solos Inc., a company with which Kopin has a business relationship and holds a **20%** equity stake[423](index=423&type=chunk)[424](index=424&type=chunk)