[10-Q] KOPIN CORP Quarterly Earnings Report
Kopin Corporation reported Q3 2025 results. Total revenue was $11.96 million versus $13.32 million a year ago, as lower research and development revenue offset steady defense-driven product sales. Operating income reached $4.53 million compared with a loss last year, primarily reflecting a $5.1 million litigation accrual reduction. Net income was $4.08 million (diluted EPS $0.02).
Year-to-date, revenue was $30.96 million versus $35.69 million and net loss narrowed to $4.20 million. Cash and cash equivalents were $26.51 million. The company ended the quarter with an accrued litigation liability of $19.7 million.
After quarter-end, Kopin posted a $23.0 million supersedeas bond related to the BlueRadios judgment, secured by a $24.2 million deposit classified as restricted cash. Remaining performance obligations totaled $39.1 million expected over the next 12 months. Shares outstanding were 182,513,346 as of November 12, 2025.
- None.
- None.
Insights
Profit aided by accrual reversal; litigation cash is restricted.
Q3 profitability stems largely from a
Subsequent to quarter-end, Kopin posted a
The company cites
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding as of November 12, 2025 | |
| Common
Stock, par value $ |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
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Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
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was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No
Kopin Corporation
INDEX
| Page No. | ||
| Part I – Financial Information | ||
| Item 1. | Condensed Consolidated Financial Statements (Unaudited) | 3 |
| Condensed Consolidated Balance Sheets at September 27, 2025 (Unaudited) and December 28, 2024 | 3 | |
| Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 27, 2025 and September 28, 2024 | 4 | |
| Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the three and nine months ended September 27, 2025 and September 28, 2024 | 5 | |
| Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the three and nine months ended September 27, 2025 and September 28, 2024 | 6 | |
| Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 27, 2025 and September 28, 2024 | 7 | |
| Notes to Unaudited Condensed Consolidated Financial Statements | 8 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 20 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 25 |
| Item 4. | Controls and Procedures | 25 |
| Part II – Other Information | ||
| Item 1. | Legal Proceedings | 26 |
| Item 1A. | Risk Factors | 27 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 27 |
| Item 6. | Exhibits | 27 |
| Signatures | 28 | |
| 2 |
Part 1. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
KOPIN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
September 27, 2025 | December 28, 2024 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Marketable securities, at fair value | — | |||||||
| Accounts receivable, net of allowance of $ | ||||||||
| Contract assets | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Other assets | ||||||||
| Equity investments | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued payroll and expenses | ||||||||
| Accrued warranty | ||||||||
| Contract liabilities | ||||||||
| Operating lease liabilities | ||||||||
| Accrued post-retirement benefits | ||||||||
| Other accrued liabilities | ||||||||
| Customer deposits | — | |||||||
| Accrued legal expenses | ||||||||
| Deferred tax liabilities | ||||||||
| Accrued litigation liability | ||||||||
| Total current liabilities | ||||||||
| Noncurrent contract liabilities and asset retirement obligations | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Accrued post-retirement benefits, net of current portion | ||||||||
| Other long-term liabilities, net of current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Notes 13 and 14) | - | - | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, par value $ | — | — | ||||||
| Common stock, par value $ | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock ( | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See notes to unaudited condensed consolidated financial statements
| 3 |
KOPIN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||
| Revenues: | ||||||||||||||||
| Net product revenues | $ | $ | $ | $ | ||||||||||||
| Research and development revenues | ||||||||||||||||
| License and other revenues | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Expenses: | ||||||||||||||||
| Cost of product revenues | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling, general and administration | ||||||||||||||||
| Litigation damages | ( | ) | — | ( | ) | |||||||||||
| Total expenses | ||||||||||||||||
| Income (loss) from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Other (expense) income | ||||||||||||||||
| Interest income | ||||||||||||||||
| Other (expense) income | ( | ) | ||||||||||||||
| Loss on impairment of investments, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Foreign currency transaction (losses) gains | ( | ) | ( | ) | ||||||||||||
| Total other (expense) income, net | ( | ) | ( | ) | ( | ) | ||||||||||
| Income (loss) before provision for income taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Tax provision | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Net income (loss) per share | ||||||||||||||||
| Basic | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Diluted | ( | ) | ( | ) | ( | ) | ||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
See notes to unaudited condensed consolidated financial statements
| 4 |
KOPIN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF comprehensive loss
(Unaudited)
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Other comprehensive loss, net of tax: | ||||||||||||||||
| Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ||||||||||
| Unrealized holding gain (loss) on investments and marketable securities | ( | ) | ||||||||||||||
| Other comprehensive gain (loss), net of tax | ( | ) | ( | ) | ||||||||||||
| Comprehensive income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
See notes to unaudited condensed consolidated financial statements
| 5 |
KOPIN CORPORATION
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
| Shares | Amount | Capital | Stock | Income | Deficit | Equity | ||||||||||||||||||||||
| Common Stock | Additional Paid-in | Treasury | Accumulated Other Comprehensive | Accumulated | Total Kopin Corporation Stockholders’ | |||||||||||||||||||||||
| Shares | Amount | Capital | Stock | Income | Deficit | Equity | ||||||||||||||||||||||
| Balance, December 28, 2024 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, March 29, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Vesting of restricted stock | ( | ) | - | - | - | - | ||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||
| Restricted stock for tax withholding obligations | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, June 28, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Vesting of restricted stock | ( | ) | - | - | - | - | ||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Other comprehensive loss | - | - | - | - | - | |||||||||||||||||||||||
| Restricted stock for tax withholding obligations | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||
| Net income | - | - | - | - | - | |||||||||||||||||||||||
| Balance, September 27, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Common Stock | Additional Paid-in | Treasury | Accumulated Other Comprehensive | Accumulated | Total Kopin Corporation Stockholders’ | |||||||||||||||||||||||
| Shares | Amount | Capital | Stock | Income | Deficit | Equity | ||||||||||||||||||||||
| Balance, December 30, 2023 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Vesting of restricted stock | ( | ) | - | - | - | - | ||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Other comprehensive income | - | - | - | - | - | |||||||||||||||||||||||
| Issuance of common stock, net of costs | - | - | - | |||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, March 30, 2024 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Vesting of restricted stock | ( | ) | - | - | - | - | ||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Other comprehensive income | - | - | - | - | - | |||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, June 29, 2024 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||
| Vesting of restricted stock | ( | ) | - | - | - | - | ||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | - | |||||||||||||||||||||||
| Issuance of common stock and pre-funded warrants, net of costs | ( | ) | - | - | ||||||||||||||||||||||||
| Other comprehensive income | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||
| Other comprehensive income (loss) | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Net income (loss) | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, September 28, 2024 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
See notes to unaudited condensed consolidated financial statements
| 6 |
KOPIN CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Nine Months Ended | Nine Months Ended | |||||||
| September 27, 2025 | September 28, 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock-based compensation | ||||||||
| Loss on disposal of property and equipment | — | |||||||
| Investment impairment net of unrealized gains | ||||||||
| Gain on sale of equity investment | ( | ) | — | |||||
| Income taxes | ||||||||
| Foreign currency (gains) losses | ( | ) | ||||||
| Provision for credit losses | — | |||||||
| Noncash provision for excess inventory | ||||||||
| Accrued litigation damages | ( | ) | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Contract assets | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ( | ) | ||||
| Prepaid expenses, other current assets and other assets | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Accrued warranty | ( | ) | ||||||
| Contract liabilities | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | ( | ) | ( | ) | ||||
| Purchases of marketable securities | ( | ) | ( | ) | ||||
| Proceeds from sale of marketable securities | ||||||||
| Proceeds from sale of equity investment | — | |||||||
| Other assets | ( | ) | ||||||
| Net cash from (used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Issuance of common stock and pre-funded warrants, net of costs | — | |||||||
| Payments of issuance costs | ( | ) | — | |||||
| Settlements of restricted stock for tax withholding obligations | ( | ) | — | |||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| Effect of exchange rate changes on cash | ||||||||
| Net increase in cash, cash equivalents and restricted cash | ||||||||
| Cash, cash equivalents and restricted cash: | ||||||||
| Beginning of period | ||||||||
| End of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Unpaid equity issuance costs | $ | $ | — | |||||
| Unpaid letter of credit debt issuance costs | — | |||||||
See notes to unaudited condensed consolidated financial statements
| 7 |
KOPIN CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Kopin Corporation is a leading developer and provider of innovative display, and application-specific optical solutions sold as critical components and subassemblies for defense, enterprise, medical, and consumer products. Kopin’s portfolio includes microdisplays, display modules, eyepiece assemblies, image projection modules, and vehicle mounted and head-mounted display systems that incorporate ultra-small high-resolution Active Matrix Liquid Crystal displays (“AMLCD”), Ferroelectric Liquid Crystal on Silicon (“FLCoS”) displays, MicroLED displays (“µLED”) and Organic Light Emitting Diode (“OLED”) displays, a variety of optics, and low-power ASICs.
1. BASIS OF PRESENTATION
The condensed consolidated financial statements of Kopin Corporation as of September 27, 2025 and for the three and nine month periods ended September 27, 2025 and September 28, 2024 are unaudited and include all normal recurring adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the periods then ended. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024, as amended. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year. As used in this report, the terms “we”, “us”, “our”, “Kopin” and the “Company” mean Kopin Corporation and its subsidiaries, unless the context indicates another meaning.
The condensed consolidated financial statements for the three and nine month periods ended September 27, 2025 and September 28, 2024 include the accounts of Kopin Corporation and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.
Liquidity
Inclusive within the issuance of the Company’s financial statements for the year ended December 28, 2024 and for the three and six months ended June 28, 2025, the Company experienced negative cash flow from operations and has had limited liquidity resources which had led management to conclude that there was substantial doubt about the Company’s ability to continue as a going concern. After the bond related to the Blue Radios, Inc. v. Kopin Corporation, Inc. judgment, as disclosed in Note 16. Subsequent Events, the Company was able to achieve sufficient financing from the PIPE so that liquidity, financial condition, and business projects will be funded. Therefore, management has concluded that the Company will be able to continue as a going concern for at least the next twelve months from the issuance of these financial statements.
| 8 |
2. ACCOUNTING STANDARDS
Recently Issued Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU Number 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires more disaggregated income tax disclosures, including additional information in the rate reconciliation and additional disclosures about income taxes paid. ASU 2023-09 became effective for the Company for the fiscal year ending December 27, 2025. The Company is currently evaluating the impact of the adoption of ASU 2023-09 on its consolidated financial statements and accompanying notes for the year ended December 27, 2025.
In November 2024, the FASB issued ASU 2024-03, which requires disaggregated disclosure of income statement expenses for public business entities (“PBEs”). The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for all PBEs for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 changes the accounting for internal-use software under Accounting Standards Codification (“ASC”) 350-40. ASU 2025-06 clarifies when to begin capitalizing costs. ASU 2025-06 is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and accompanying notes.
Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU Number 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker(s) that are included within each reported measure of segment profit or loss. The guidance also expands disclosure requirements for interim periods, as well as requires disclosure of other segment items, including the title and position of the entity’s chief operations decision maker(s). ASU 2023-07 became effective for the Company for the fiscal year ending December 28, 2024, and for interim periods starting in the Company’s first quarter of 2025. The Company adopted this standard for fiscal year 2024 and there was not a material impact, reference additional disclosure within Note 12. Segments and Disaggregation of Revenue.
3. FINANCIAL INSTRUMENTS
Fair Value Measurements
Financial instruments are categorized as Level 1, Level 2 or Level 3 based upon the method by which their fair value is computed. An investment is categorized as Level 1 when its fair value is based on unadjusted quoted prices in active markets for identical assets that the Company has the ability to access at the measurement date. An investment is categorized as Level 2 if its fair market value is based on quoted market prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, based on observable inputs such as interest rates, yield curves, or derived from or corroborated by observable market data by correlation or other means. The Company’s Level 2 investments are based on a yield to maturity models and market interest rates. An investment is categorized as Level 3 if its fair value is based on unobservable inputs for the asset.
The following table details the recurring fair value measurements of the Company’s financial assets:
SCHEDULE OF FAIR VALUE MEASUREMENTS OF FINANCIAL ASSETS
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Fair Value Measurement at September 27, 2025: | ||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Cash equivalents | $ | $ | $ | — | $ | — | ||||||||||
| Certificates of deposit | — | — | ||||||||||||||
| Equity Investments | — | — | ||||||||||||||
| Financial assets | $ | $ | $ | $ | — | |||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Fair Value Measurement at December 28, 2024: | ||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Cash equivalents | $ | $ | $ | $ | — | |||||||||||
| U.S. Government and agency backed securities | — | |||||||||||||||
| Certificates of deposit | — | — | ||||||||||||||
| Equity Investments | — | — | ||||||||||||||
| Financial assets | $ | $ | $ | $ | — | |||||||||||
The
carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because
of their short-term nature. There was $
| 9 |
Marketable Securities
The Company validates the fair market values of the financial instruments below by using a model that incorporates current interest rates and remaining term. The restricted cash balance at September 27, 2025 and December 28, 2024 is invested in a certificate of deposit and money market funds. The restricted cash balance that is invested in a certificate of deposit is classified as an available-for-sale marketable security. Investments in available-for-sale marketable securities are as follows at September 27, 2025 and December 28, 2024:
SCHEDULE OF AVAILABLE-FOR-SALE MARKETABLE DEBT SECURITIES
| Amortized Cost | Unrealized (Loss) Gain | Fair Value | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| U.S. Government and agency backed securities | $ | — | $ | $ | — | $ | $ | — | $ | |||||||||||||||
| Certificates of deposit | — | |||||||||||||||||||||||
| Total | $ | $ | $ | — | $ | $ | $ | |||||||||||||||||
The contractual maturity of the Company’s marketable debt securities is as follows at September 27, 2025:
SCHEDULE OF CONTRACTUAL MATURITY OF MARKETABLE DEBT SECURITIES
| Less than One year | One to Five years | Total | ||||||||||
| Certificates of deposit | $ | $ | — | $ | ||||||||
Equity Investments
Equity
investments rarely traded or not quoted will generally have less (or no) pricing observability and a higher degree of judgment utilized
in measuring fair value. Initial measurement of equity investments occurs when an observable price for the equity investment is available.
The Company adopted the measurement alternative for equity investments without readily determinable fair values, which is often referred
to as cost method investments, adjusted for changes in observable market transactions. As a result, these investments are revalued upon
occurrence of an observable price change for similar investments and for impairments. As of September 27, 2025 and December 28, 2024,
the carrying value of these equity investments was $
The
Company has an equity interest in a Lenovo New Vision which it acquired through purchasing capital and contributing certain intellectual
property. As of September 27, 2025, the Company owned an approximate
The
Company has an investment in RealWear Inc. (RealWear) which had been valued at $
The
Company has an equity investment in Solos Incorporation (“Solos Inc.”). The carrying value of this equity investment was
$
The
Company has an equity investment in HMDmd. The carrying value of this equity investment was $
| 10 |
4. ACCOUNTS RECEIVABLE, NET
Accounts receivable consisted of the following:
SCHEDULE OF ACCOUNTS RECEIVABLE
| September 27, 2025 | December 28, 2024 | |||||||
| Accounts receivable | $ | $ | ||||||
| Less — allowance for credit losses | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
Changes to the allowance for credit losses for the nine months ended September 27, 2025 and September 28, 2024 were as follows:
SCHEDULE OF CHANGE IN ALLOWANCE FOR CREDIT LOSSES
September 27, 2025 | September 28, 2024 |
|||||||
| Beginning balance | $ | $ | 1,025,000 | |||||
| Additions | — | 24,000 |
||||||
| Reductions | ( | ) | (34,000 |
) | ||||
| Ending balance | $ | $ | 1,015,000 |
|||||
5. INVENTORY
Inventories are stated at standard cost adjusted to approximate the lower of cost (first-in, first-out method) or net realizable value and consist of the following at September 27, 2025 and December 28, 2024:
SCHEDULE OF INVENTORY
| September 27, 2025 | December 28, 2024 | |||||||
| Raw materials | $ | $ | ||||||
| Work-in-process | ||||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
6. NET INCOME (LOSS) PER SHARE
Basic net income (loss) per share is computed using the weighted-average number of shares of common stock outstanding during the period including the pre-funded warrants, less any unvested restricted shares. Diluted net income (loss) per share is calculated using weighted-average shares outstanding, including the pre-funded warrants, and contingently issuable shares, less weighted-average shares reacquired during the period. The net outstanding shares are adjusted for the dilutive effect of shares issuable upon the assumed conversion of the Company’s common stock equivalents, which consist of unvested restricted stock.
Weighted average common shares outstanding used to calculate earnings per share are as follows:
SCHEDULE OF WEIGHTED AVERAGE COMMON SHARES OUTSTANDING USED TO CALCULATE EARNINGS PER SHARE
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||
| Weighted average common shares outstanding-basic | ||||||||||||||||
| Stock options and nonvested restricted common stock | — | — | — | |||||||||||||
| Weighted average common shares outstanding-diluted | ||||||||||||||||
The following were not included in weighted-average common shares outstanding-diluted because they are anti-dilutive:
SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||
| Non-vested restricted common stock | ||||||||||||||||
| Stock options | — | — | — | |||||||||||||
| 11 |
7. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION
Registered sale of equity securities
On
September 23, 2024, the Company sold
During
the three months ended March 30, 2024, the Company sold
On
June 6, 2024, the Company’s shareholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation
(the “Charter”) to increase the number of authorized shares of the Company’s common stock, par value $
As of September 27, 2025 and December 28, 2024, the Company had
Non-Vested Restricted Common Stock
The
fair value of non-vested restricted common stock awards is generally the market value of the Company’s common stock on the date
of grant. The non-vested restricted common stock awards require the employee to fulfill certain obligations, including remaining employed
by
Restricted stock activity for the nine month period ended September 27, 2025 was as follows:
SCHEDULE OF NON-VESTED RESTRICTED STOCK ACTIVITY
| Shares | Weighted Average Grant Fair Value | Fair Value | Intrinsic Value | |||||||||||||
| Non-vested at December 28, 2024 | $ | $ | $ | |||||||||||||
| Granted | - | |||||||||||||||
| Forfeited | ( | ) | ( | ) | - | |||||||||||
| Vested | ( | ) | ( | ) | - | |||||||||||
| Non-vested at September 27, 2025 | $ | $ | $ | |||||||||||||
| Expected to vest | ||||||||||||||||
| 12 |
Stock-Based Compensation
The following table summarizes stock-based compensation expense within each of the categories below as it relates to non-vested restricted common stock and stock options awards for the three and nine months ended September 27, 2025 and September 28, 2024 (no tax benefits were recognized):
SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||
| Cost of product revenues | $ | $ | $ | $ | ||||||||||||
| Research and development | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Unrecognized
compensation expense for non-vested restricted common stock as of September 27, 2025 totaled $
Stock Options
During
the three months ended March 29, 2025, an option award for
SCHEDULE OF STOCK OPTIONS VALUATION ASSUMPTIONS
| Three Months Ended | Nine Months Ended | |||||||
| September 27, 2025 | September 27, 2025 | |||||||
| Average risk-free interest rate | % | % | ||||||
| Expected dividend yield | ||||||||
| Expected life (average, in years) | ||||||||
| Expected volatility | % | % | ||||||
| Weighted average exercise price | $ | $ | ||||||
| Weighted average fair value | $ | $ | ||||||
The Company’s 2025 average expected volatility and average expected life is based on the average of the Company’s historical information. The risk-free rate is based on the rate of U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of option grants. The Company has paid no dividends on its common stock in the past and does not anticipate paying any dividends in the future.
A summary of stock option activity for the period ended September 27, 2025 is as follows:
SCHEDULE OF STOCK OPTION ACTIVITY
| Number of Options | Weighted Average Exercise Price | Intrinsic Value | ||||||||||
| Outstanding as of December 28, 2024 | — | $ | — | $ | — | |||||||
| Granted | $ | |||||||||||
| Outstanding as of September 27, 2025 | $ | $ | ||||||||||
| Options exercisable as of September 27, 2025 | $ | $ | ||||||||||
8. ACCRUED WARRANTY
The
Company typically warrants its products against defect for
SCHEDULE OF ACCRUED WARRANTY
September 27, 2025 | September 28, 2024 |
|||||||
| Beginning balance | $ | $ | ||||||
| Additions | ||||||||
| Settlements of warranty claims | ( | ) | ( |
) | ||||
| Ending balance | $ | $ | ||||||
Extended Warranties
9. INCOME TAXES
The
Company recorded a provision for income taxes of less than $
On July 4, 2025, the President signed into law the One Big Beautiful Bill Act (the “Act”), which introduced significant changes to the U.S. federal income tax code. The Act includes provisions affecting corporate tax rates on specified eligible income, timing of tax deductibility of depreciation, interest expense and research and development costs, and the taxation of foreign income. The effects of these changes will be recognized in the period that contains the effective date of the relevant change. We currently do not expect the Act to have a material impact on our financial statements. We will continue to evaluate the broader implications of the Act, including the potential effects of future regulatory guidance and interpretations. Additional adjustments may be required in periods subsequent to enactment as further information becomes available.
| 13 |
10. REVENUE RECOGNITION AND CONTRACT ASSETS AND LIABILITIES
Revenue Recognition
Substantially all of the Company’s product and license and other revenues are derived from the sales of components and subassemblies and the license of intellectual property for use in defense and industrial applications. The Company also has development contracts for the design, manufacture and or modification of products for the U.S. Government or prime contractors for the U.S. Government and for customers that expect to sell into the defense markets. The Company may offer technologies developed under these defense research and development contracts in products sold to industrial, medical and consumer markets. The Company’s contracts with the U.S. Government are typically subject to the Federal Acquisition Regulations (“FAR”) and are priced based on estimated or actual costs of producing goods. The FAR provides guidance on the types of costs that are allowable in establishing prices for goods provided under U.S. Government contracts. The pricing for non-U.S. Government contracts is based on the specific negotiations with each customer.
In accordance with ASC 606, revenue is recognized when a customer obtains control of promised products, and the amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these products and excludes taxes collected from customers which are subsequently remitted to government authorities.
The Company applies the following five steps to guide revenue recognition:
| 1) | Identify the contract(s) with a customer—A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the products to be transferred and identifies the payment terms related to those products, (ii) the contract has commercial substance and (iii) the Company determines that collection of substantially all consideration for products that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company’s contracts are typically in the form of a purchase order. For certain large customers, the Company may also enter into master service agreements that define general terms but are not customer commitments to purchase until coupled with a purchase order. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or published credit and financial information pertaining to the customer. | |
| 2) | Identify the performance obligations in the contract—Performance obligations promised in a contract are identified based on the products and services that will be transferred. A product or service is distinct if both a) the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from the Company, and b) is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised products or services, the Company must apply judgment to determine whether the products or services meet the criteria to be distinct. If these criteria are not met the promised products or services are accounted for as a combined performance obligation. | |
| 3) | Determine the transaction price—The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products to the customer. The Company historically does not have contracts with variable consideration but to the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. | |
| 4) | Allocate the transaction price to the performance obligations in the contract—If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. The Company’s contracts do not typically contain multiple performance obligations that require an allocation of the transaction price to each performance obligation on a relative Stand-alone Sales Price (“SSP”). During the years ended 2024, 2023 and 2022 the Company did not have contracts with multiple performance obligations. | |
| 5) | Recognize revenue when (or as) the Company satisfies a performance obligation—The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised product or service to a customer. |
Product Revenues
For certain contracts with prime contractors for the U.S. Government, the Company recognizes product revenue over time as the Company performs because of continuous transfer of control to the customer and the lack of an alternative use for the product. The continuous transfer of control to the customer is supported by liability clauses in the contract that allow the U.S. Government to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit and take control of any work in process and finished goods.
In situations where control transfers over time, product revenue is recognized based on the extent of progress towards completion of the performance obligation. The Company uses the cost-to-cost input method to measure the extent of progress towards completion of the performance obligation for its contracts because the Company believes it best depicts the transfer of assets to the customer. Under the cost-to-cost input method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation which includes the expected yield which is a significant judgment. Revenues are recorded proportionally as costs are incurred.
For certain contracts with prime contractors for the U.S. Government and commercial customers, while the contract may have a similar liability clause, the Company’s products historically have an alternative use and thus, revenue is recognized at a point in time upon transfer of control. Provisions for product returns and allowances are reductions in the transaction price and are recorded in the same period as the related revenues. The Company analyzes historical returns, current economic trends and changes in customer demand when evaluating the adequacy of sales returns and other allowances.
Research & Development Contracts
For most of the Company’s development contracts and contracts with the U.S. Government, the customer contracts with the Company to provide a significant service of integrating a set of components into a single unit. Since these performance obligations are not distinct or capable or being distinct, the entire contract is accounted for as one performance obligation. If there is a follow-on production contract it is assessed whether it is a contract modification or a new contract.
| 14 |
In situations where control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The Company generally uses an input method using the cost-to-cost approach to measure the extent of progress towards completion of the performance obligation for its contracts because the Company believes it best depicts the transfer of assets to the customer. Under the cost-to-cost measure approach, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation which requires management to use significant assumptions and judgments. Revenues are recorded proportionally as costs are incurred.
License and other revenues
The rights and benefits to the Company’s intellectual property are conveyed to certain customers through royalty bearing technology license agreements. These sales-based royalties are recognized when they are earned. Revenues from sales-based royalties under license agreements are shown under License and other revenues on the Company’s consolidated statements of operations.
Contract assets include unbilled amounts typically resulting from sales under contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized from customer arrangements, including licensing, exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time. Amounts may not exceed their net realizable value. Contract assets are generally classified as current. The Company classifies the noncurrent portion of contract assets under Other assets in its condensed consolidated balance sheets.
Contract liabilities consist of advance payments and billings in excess of revenue recognized for the contract.
Contract assets and contract liabilities consisted of the following:
SCHEDULE OF CONTRACT ASSETS AND (LIABILITIES
| September 27, 2025 | December 28, 2024 | December 30, 2023 | ||||||||||
| Current contract assets | $ | $ | $ | |||||||||
| Current contract liabilities and billings in excess of revenue earned | ( | ) | ( | ) | ( | ) | ||||||
| Noncurrent contract liabilities | ( | ) | ( | ) | ( | ) | ||||||
The
$
The
$
The Company records contract assets or contract liabilities on a contract-by-contract basis. The Company records a contract asset for unbilled revenue when the Company’s performance exceeds amounts billed. The Company classifies the contract asset as current based on the expected timing of the Company’s right to bill under the terms of the contract, which the Company expects to be able to bill for within one year.
Contract liabilities consist of payments received in advance of product shipment. The liability is removed with shipment of the product.
In
the three and nine months ended September 27, 2025, the Company recognized revenue of $
The Company did not recognize impairment losses on its contract assets in the three or nine months ended September 27, 2025, or the years ended December 28, 2024 or December 30, 2023.
Performance Obligations
The Company’s revenue recognition related to performance obligations that were satisfied at a point in time and over time were as follows:
SCHEDULE OF SATISFACTION OF PERFORMANCE OBLIGATION
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||
| Point in time | % | % | % | % | ||||||||||||
| Over time | % | % | % | % | ||||||||||||
| Performance obligation percentage | % | % | % | % | ||||||||||||
Remaining
performance obligations represent the transaction price of orders for which work has not been performed and excludes unexercised
contract options and potential orders under ordering-type contracts. As of September 27, 2025, the aggregate amount of the
transaction price allocated to remaining performance obligations which the Company expects to recognize over the next 12 months was
$
| 15 |
11. LEASES
The Company enters into operating leases primarily for: real estate, including for manufacturing, engineering, research, administration and sales facilities, and information technology (“IT”) equipment. At September 27, 2025 and December 28, 2024, the Company did not have any finance leases. Approximately all of its future lease commitments, and related lease liability, relate to the Company’s real estate leases. Some of the Company’s leases include options to extend or terminate the lease.
The components of lease expense were as follows:
SCHEDULE OF LEASE EXPENSE
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||
| Operating lease cost | $ | $ | $ | $ | ||||||||||||
At September 27, 2025, the Company’s future lease payments under non-cancellable leases were as follows:
SCHEDULE OF FUTURE LEASE PAYMENT UNDER NON-CANCELLABLE LEASE
| 2025 (excluding the nine months ended September 27, 2025) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | — | |||
| Total future lease payments | ||||
| Less effects of discounting | ( | ) | ||
| Total | $ |
The Company’s lease liabilities recognized in the Company’s condensed consolidated balance sheet at September 27, 2025 were as follows:
SCHEDULE OF OPERATING LEASE PAYMENTS RECOGNIZED IN CONSOLIDATED BALANCE SHEETS
| September 27, 2025 | ||||
| Operating lease liabilities–current | $ | |||
| Operating lease liabilities–noncurrent | ||||
| Total lease liabilities | $ | |||
Supplemental cash flow information related to leases was as follows:
SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES
| Nine Months Ended | Nine Months Ended | |||||||
| September 27, 2025 | September 28, 2024 | |||||||
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | ||||||
Other information related to leases was as follows:
| September 27, 2025 | September 28, 2024 | |||||||
| Weighted Average Discount Rate–Operating Leases | % | % | ||||||
| Weighted Average Remaining Lease Term–Operating Leases (in years) | ||||||||
| 16 |
12. SEGMENTS AND DISAGGREGATION OF REVENUE
Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its President and Chief Executive Officer. The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.
The CODM assesses performance and decides how to allocate resources and make operating decisions based on revenues, income (loss) from operations, and net income (loss) that are reported on the Consolidated Statements of Operations. These metrics are also used to monitor budget versus actual results. The measure of segment assets is reported on the Consolidated Balance Sheets as total assets. Revenues, expenses, and assets requiring disclosure in accordance with ASC 280, Segment Reporting, are also included in the accompanying Condensed Consolidated Financial Statements. See the Condensed Consolidated Statements of Operations for the three and nine months ended September 27, 2025 and September 28, 2024 and the Consolidated Balance Sheets as of September 27, 2025 and December 28, 2024, for details.
Total long-lived assets by country at September 27, 2025 and December 28, 2024 were:
SCHEDULE OF LONG-LIVED ASSETS BY GEOGRAPHIC AREAS
| Total Long-lived Assets (in thousands) | September 27, 2025 | December 28, 2024 | ||||||
| United States | $ | $ | ||||||
| United Kingdom | ||||||||
| Total | $ | $ | ||||||
| Long lived assets | $ | $ | ||||||
The Company disaggregates its revenue from contracts with customers by geographic location and by display application, as it believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.
During the three and nine months ended September 27, 2025 and September 28, 2024, the Company derived its sales from the following geographies:
SCHEDULE SEGMENT INFORMATION BY REVENUE TYPE
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||||||||||||
| (In thousands, except percentages) | Revenue | % of Total | Revenue | % of Total | Revenue | % of Total | Revenue | % of Total | ||||||||||||||||||||||||
| United States | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||
| Other Americas | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Total Americas | ||||||||||||||||||||||||||||||||
| Asia - Pacific | ||||||||||||||||||||||||||||||||
| Europe | ||||||||||||||||||||||||||||||||
| Total Revenues | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||
During the three and nine months ended September 27, 2025 and September 28, 2024, the Company derived its sales from the following display applications:
SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| (In thousands) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||
| Defense | $ | $ | $ | $ | ||||||||||||
| Industrial | ||||||||||||||||
| Medical | — | — | ||||||||||||||
| Consumer and other | — | |||||||||||||||
| R&D | ||||||||||||||||
| License and royalties | ||||||||||||||||
| Total Revenues | $ | $ | $ | $ | ||||||||||||
| 17 |
13. COMMITMENTS AND CONTINGENCIES
The Company is subject to the possibility of loss contingencies arising in the ordinary course of business. Management considers the likelihood of loss related to an asset, or the incurrence of a liability, as well as its ability to reasonably estimate the amount of the loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired, or a liability has been incurred and the amount of loss can be reasonably estimated. The Company regularly evaluates current information available to determine whether such accruals should be adjusted and whether new accruals are required. See Note 16. Subsequent Events for supersedeas bond and letter of credit entered into in October 2025 in relation to the BlueRadios, Inc. v. Kopin Corporation, Inc judgment.
14. LITIGATION
The Company may engage in legal proceedings arising in the ordinary course of business. Claims, suits, investigations and proceedings are inherently uncertain and it is not possible to predict the ultimate outcome of such matters and the Company’s business, financial condition, results of operations or cash flows could be affected in any particular period. In accordance with applicable accounting guidance, an accrual will be established for legal proceedings if and when those matters present loss contingencies that are both probable and estimable.
BlueRadios, Inc. v. Kopin Corporation, Civil Action No. 16-02052-JLK (D. Col.):
On August 12, 2016, BlueRadios, Inc. (“BlueRadios”) filed a complaint in the U.S. District Court for the District of Colorado, alleging that the Company breached a contract between it and BlueRadios concerning a joint venture between the Company and BlueRadios to design, develop and commercialize micro-display products with embedded wireless technology referred to as “Golden-i,” breached the covenant of good faith and fair dealing associated with that contract, breached its fiduciary duty to BlueRadios, and misappropriated trade secrets owned by BlueRadios in violation of Colorado law (C.R.S. § 7-74-104(4)) and the Defend Trade Secrets Act (18 U.S.C. § 1836(b)(1)). BlueRadios further alleged that the Company was unjustly enriched by its alleged misconduct, BlueRadios is entitled to an accounting to determine the amount of profits obtained by the Company as a result of its alleged misconduct, and the inventorship on at least ten patents or patent applications owned by the Company need to be corrected to list BlueRadios’ employees as inventors and thereby list BlueRadios as co-assignees of the patents. BlueRadios seeks monetary, declaratory, and injunctive relief, including for alleged non-payment of engineering retainer fees.
On
October 11, 2016, the Company filed its Answer and Affirmative Defenses. The parties completed expert depositions on November 15, 2019.
On July 30, 2019, the Court granted Kopin partial summary judgment on BlueRadios’ claim for breach of a contractual obligation
to pay a $
On
September 5, 2025, a post-trial order was entered in the U.S. District Court for the District of Colorado in the matter of BlueRadios,
Inc. v. Kopin Corporation, Inc. finding for the plaintiff, BlueRadios, Inc. and awarding approximately $
On
September 26, 2025, the Company and its lawyers entered into a Mutual Release agreement (the “Release”) in which accrued
legal expenses in connection with the BlueRadios litigation were resolved. The release reduced unpaid accrued legal expenses by $
| 18 |
15. RELATED PARTY TRANSACTIONS
The Company may from time to time enter into agreements with stockholders, affiliates and other companies engaged in certain aspects of the display, electronics, optical and software industries as part of its business strategy. In addition, the wearable computing product market is relatively new and there may be other technologies the Company needs to purchase from affiliates to enhance its product offering.
On
September 30, 2019, the Company entered into an Asset Purchase Agreement (the “Solos Purchase Agreement”) with Solos Technology
Limited (“Solos Technology”). Pursuant to the Solos Purchase Agreement, the Company sold and licensed to Solos Technology
certain assets of its SolosTM (“Solos”) product line and WhisperTM Audio (“Whisper”) technology.
As consideration for the transaction the Company received
As of December 28, 2024, the Company’s former Chairman and founder of Solos Inc., Dr. John C.C. Fan, has an investment in Solos Inc.
The
Company has warrants to purchase shares of Preferred Stock of HMDmd. The fair value of the investment was determined to be $
On
January 5, 2023, the Company entered into a Technology License Agreement and an Asset Purchase Agreement (the “LST Agreements”)
with Lightning Silicon Technology, Inc (“LST”). Pursuant to the LST Agreements, the Company issued a license to LST for certain
technology associated with our Organic Light Emitting Technology, transferred in-process development contracts with two customers and
accounts receivables that the Company had previously determined were not collectible. As consideration for the transaction, the Company
received
As of September 27, 2025, the Company’s former Chairman and founder of Lightning Silicon Technology, Inc., Dr. John C.C. Fan, has an individual ownership interest of Lightning Silicon Technology Inc.
On
September 6, 2022, John C.C. Fan, the Company’s then President and Chief Executive Officer and Chairman of the Company’s
Board of Directors, resigned as President and CEO. Under the terms of his previous employment agreement Dr. Fan received $
During the three and nine months ended September 27, 2025 and September 28, 2024, the Company had the following transactions with related parties:
SCHEDULE OF REVENUE WITH RELATED PARTIES
| Three Months Ended | ||||||||||||||||
| September 27, 2025 | September 28, 2024 | |||||||||||||||
| Sales | Purchases | Sales | Purchases | |||||||||||||
| RealWear, Inc. | $ | $ | — | $ | $ | — | ||||||||||
| HMDmd, Inc. | — | — | ||||||||||||||
| Solos Technology | — | — | — | |||||||||||||
| Lightning Silicon Technology, Inc. | — | |||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Nine Months Ended | ||||||||||||||||
| September 27, 2025 | September 28, 2024 | |||||||||||||||
| Sales | Purchases | Sales | Purchases | |||||||||||||
| RealWear, Inc. | $ | $ | — | $ | $ | |||||||||||
| HMDmd, Inc. | — | — | ||||||||||||||
| Vuzix Corp | — | — | — | |||||||||||||
| Solos Technology | — | — | — | |||||||||||||
| Lightning Silicon Technology, Inc. | — | |||||||||||||||
| $ | $ | $ | $ | |||||||||||||
At September 27, 2025 and December 28, 2024, the Company had the following receivables and payables with related parties:
| September 27, 2025 | December 28, 2024 | |||||||||||||||
| Receivables | Payables | Receivables | Payables | |||||||||||||
| RealWear, Inc. | $ | $ | — | $ | $ | — | ||||||||||
| HMDmd, Inc. | — | — | — | |||||||||||||
| Solos Technology | — | — | — | |||||||||||||
| Lightning Silicon Technology, Inc. | — | — | ||||||||||||||
| $ | $ | — | $ | $ | ||||||||||||
16. SUBSEQUENT EVENTS
On
September 29, 2025, the Company announced that it has entered into a securities purchase agreement (the “Purchase Agreement”)
for a private investment in public equity financing (the “PIPE”) for
As
described in Note 14. Litigation, on September 5, 2025, a post-trial order was entered in the U.S. District Court for the District
of Colorado in the matter of BlueRadios, Inc. v. Kopin Corporation, Inc. finding for the plaintiff, BlueRadios, Inc. and awarding
approximately $
On
October 16, 2025, a $
| 19 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the safe harbor created by such sections. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “could,” “would,” “seeks,” “estimates,” and variations of such words and similar expressions, and the negatives thereof, are intended to identify such forward-looking statements. We caution readers not to place undue reliance on any such “forward-looking statements,” which speak only as of the date made, and advise readers that these forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, estimates, and assumptions by us that are difficult to predict. Various factors, some of which are beyond our control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. All such forward-looking statements, whether written or oral, and whether made by us or on our behalf, are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this report, except as may otherwise be required by the federal securities laws.
We have identified the following important factors that could cause actual results to differ materially from those discussed in our forward-looking statements. Such factors may be in addition to the risks described in Part I, Item 1A. “Risk Factors;” Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” and other parts of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, as amended. These factors include: our ability to source semiconductor components and other raw materials used in the manufacturing of our products amidst continued intermittent shortages, including from new and alternative suppliers; our ability to prosecute and defend our proprietary technology aggressively or successfully; our ability to recruit and retain personnel with experience and expertise relevant to our business; our ability to invest in research and development to achieve profitability even during periods when we are not profitable; any disruptions or delays in our supply chains, particularly with respect to semiconductor components, whether resulting from regional or global geopolitical developments, changes imposed by the new U.S. presidential administration, the current U.S. government shutdown, or otherwise; costs and outcomes relating to any disputes, governmental inquiries or investigations, regulatory proceedings, legal proceedings or litigation; our ability to continue to introduce new products in our target markets; our ability to generate revenue growth and positive cash flow, and reach profitability; the strengthening of the U.S. dollar and its effects on the price of our products in foreign markets; the impact of new regulations and customer demands relating to conflict minerals; our ability to obtain a competitive advantage in the wearable technologies market through our extensive portfolio of patents, trade secrets and non-patented know-how; our ability to grow within our targeted markets; the importance of small form factor displays in the development of defense, consumer, and industrial products such as thermal weapon sights, safety equipment, virtual and augmented reality gaming, training and simulation products and metrology tools; the suitability of our properties for our needs for the foreseeable future; and our need to achieve and maintain positive cash flow and profitability.
Overview
We are a leading developer, manufacturer and seller of miniature displays and optical lenses (our “components”) for sale as individual displays, components, modules or higher-level subassemblies. We also license our intellectual property through technology license agreements. Our component products are used in highly demanding high-resolution portable defense, enterprise and consumer electronic applications, training and simulation equipment and 3D metrology equipment. Our products enable our customers to develop and market an improved generation of products for these target applications.
The following discussion should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, as amended and our unaudited condensed consolidated financial statements included in this Form 10-Q.
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Results of Operations
Our interim period results of operations and period-to-period comparisons of such results may not be indicative of our future operating results. Additionally, we use a fiscal calendar that may result in differences in the number of workdays in the current and comparable prior interim periods and could affect period-to-period comparisons. The following discussion of comparative results of operations among periods should be viewed in this context.
Revenues. For the three and nine months ended September 27, 2025 and September 28, 2024, our revenues by display application, which include product sales and amounts earned from research and development contracts (“R&D”), were as follows:
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| (In thousands) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||
| Defense | $ | 9,934 | $ | 10,434 | $ | 24,618 | $ | 29,095 | ||||||||
| Industrial | 749 | 489 | 2,172 | 1,883 | ||||||||||||
| Medical | 1 | — | 574 | — | ||||||||||||
| Consumer and other | 9 | — | 58 | 25 | ||||||||||||
| R&D | 1,200 | 2,268 | 3,345 | 4,338 | ||||||||||||
| License and royalties | 69 | 129 | 189 | 348 | ||||||||||||
| Total Revenues | $ | 11,962 | $ | 13,320 | $ | 30,956 | $ | 35,689 | ||||||||
Sales of our products for Defense applications include systems used by the military both in the field and for training and simulation. The decrease in Defense applications revenues in the three months ended September 27, 2025 as compared to the three months ended September 28, 2024 was primarily due to a decrease in revenues from products used in pilot helmets and training and simulation which was partially offset by an increase in sales from products used in thermal weapon sights. The decrease in Defense applications revenues in the nine months ended September 27, 2025 as compared to the nine months ended September 28, 2024 was primarily due to a decrease in revenues from products used in thermal weapon sights, training and simulation, and pilot helmets.
Industrial applications revenue represents customers who purchase our display products for use in 3D automated optical inspection (“3DAOI”) equipment and head-mounted displays used for applications in public safety. The increase in Industrial applications revenues for the three and nine months ended September 27, 2025 as compared to the three months ended September 28, 2024 was primarily due to an increase in revenues from products used in a public safety application which was partially offset by a decline in products used for 3D automated optical inspection. We have launched a new product for the 3DAOI and our ability to compete in this market will rely upon acceptance of this product which we are unable to forecast.
Medical revenues in 2025 represent the initial shipments of a head-mounted medical product. There were minimal revenues from the sales of this product in the third quarter of 2025 as the products sold in the first six months of 2025 are being evaluated by ultimate customers.
Sales of our displays for Consumer applications are typically “one-off” purchases from companies or organizations using our products for research and development.
R&D revenues decreased in the three and nine months ended September 27, 2025 as compared to the three and nine months ended September 28, 2024 primarily due to decreases in funding for U.S. defense programs. We were awarded a $15.4 million Other Transaction Agreement (“OTA”) from the Office of the Secretary of War (“OSW”) through the U.S. Army Contracting Command (“ACC”) under the Industrial Base Analysis and Sustainment (“IBAS”) program. This contract is for the development of ultra-bright, full-color MicroLED displays optimized for ground soldier augmented reality (“AR”) applications. As a result of this contract and other contracts we have received, we believe funded research and development revenues will increase in fiscal year 2026 as compared to fiscal year 2025. This belief is based on assumption of meeting required milestones in these contracts which may be delayed or not met which can affect the timing of revenue recognition.
The decrease in license and royalty revenue in the three and nine months ended September 27, 2025 as compared to the three and nine months ended September 28, 2024 is due to a decrease in royalties earned under IP license agreements for industrial wearable headsets.
Our international revenues, which are primarily our sales of our products into the 3D AOI market and which comprise the majority of our Industrial sales category, represented 3% and 4% of total revenues for the three and nine months ended September 27, 2025, respectively, and 5% and 7% of total revenues for the three and nine months ended September 28, 2024, respectively. These sales are primarily made by Kopin Europe, Ltd. (“KEL”) our then wholly-owned Scottish subsidiary as of September 27, 2025 in Asian markets. In October 2025, we sold a 49% interest in KEL to Theon. We expect to expand the operations of KEL through the development of new products. We are unable to forecast when the products would be available, if successfully developed, to generate revenue. We have not taken any protective measures against exchange rate fluctuations, such as purchasing hedging instruments with respect to such fluctuations, because of the historically stable exchange rate between the British Pound Sterling (the functional currency of our U.K. subsidiary) and the U.S. dollar. Foreign currency translation impact on our results, if material, is described in further detail under “Item 3. Quantitative and Qualitative Disclosures About Market Risk” section below.
Cost of Product Revenues. Cost of product revenues, which is comprised of materials, labor and manufacturing overhead related to the production of our products for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| (In thousands, except for percentages) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||
| Cost of product revenues | $ | 8,397 | $ | 8,317 | $ | 23,098 | $ | 25,544 | ||||||||
| Cost of product revenues as a % of net product revenues | 79 | % | 76 | % | 84 | % | 82 | % | ||||||||
The cost of product revenues as a percentage of net product revenues for the three and nine months ended September 27, 2025, as compared to the three and nine months ended September 28, 2024 increased due to higher costs to manufacture training and simulation products and 3DAOI products which was partially offset by improved efficiency in making products for thermal weapon sights. The increase in cost to manufacture training and simulation and 3DAOI products is due to lower volumes which results in a higher fixed cost per unit.
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The United States government is or is in the process of increasing or implementing tariffs on the importation of certain goods. In some cases, our contracts allow us to pass along new or increased tariffs subject to ability to prove the impact of the tariff on the cost of our product. If we are unable to increase our prices due to the implementation or increase in tariff, duties and other taxes our gross margin and overall profitability would be negatively impacted.
The issues associated with the global shortage of semiconductor circuit chips and other raw materials decreased in 2025 as compared to 2024. However, we have identified several semiconductor components which continue to have long lead delivery times. We continue to search for and procure all necessary components from our current vendors and new alternative vendors. In certain situations, we can obtain the components but at a significantly increased cost. The inability to procure a single component will prevent the completion of our product and the ability to sell the product. Our products go through extensive qualification processes and therefore our customers may not accept a replacement component. If we are unable to obtain all necessary components, we may be required to stop production, which would negatively affect our cash flow and results of operations. In addition, we depend on a Taiwanese foundry for the manufacture of integrated circuits for our AMLCD display products and on Chinese, Korean, and European foundries for our OLED display products. If there was a disruption of supply from these foundries it would take a significant period of time to identify, and qualify, if possible, a new source.
Research and Development. R&D expenses are incurred in support of internal display development programs and programs funded by agencies or prime contractors of the U.S. Government and commercial partners. R&D costs include staffing, purchases of materials and laboratory supplies, circuit design costs, fabrication and packaging of display products, and overhead. In fiscal year 2025, our R&D expenditures are related to our display products, overlay weapon sight modules and production automation. In addition, in October 2025 we sold a 49% interest in KEL to Theon. We expect to expand the operations of KEL through the development of new products. Funded and internal R&D expenses are combined in research and development expenses in the condensed consolidated statement of operations. R&D expenses for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| (In thousands) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||
| Funded | $ | 647 | $ | 1,123 | $ | 1,749 | $ | 2,598 | ||||||||
| Internal | 1,856 | 1,474 | 4,815 | 3,939 | ||||||||||||
| Total research and development expense | $ | 2,503 | $ | 2,597 | $ | 6,564 | $ | 6,537 | ||||||||
Funded R&D expense for the three and nine months ended September 27, 2025 decreased as compared to the three and nine months ended September 28, 2024 primarily due to decreased spending on U.S. defense programs and programs previously in development are transitioning into production. Internal R&D expense increased due to an increase in internally developed technology focused on future process improvements. We were awarded a $15.4 million Other Transaction Agreement (“OTA”) from the Office of the Secretary of War (“OSW”) through the U.S. Army Contracting Command (“ACC”) under the Industrial Base Analysis and Sustainment (“IBAS”) program. This contract is for the development of ultra-bright, full-color MicroLED displays optimized for ground soldier augmented reality (“AR”) applications. As a result of this contract and other contracts we have received we believe funded research and development expenses will increase in fiscal year 2026 as compared to fiscal year 2025.
Selling, General and Administrative. Selling, general and administrative (“S,G&A”) expenses consist of the expenses incurred by our sales and marketing personnel and related expenses, and administrative and general corporate expenses. S,G&A expenses for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| (In thousands, except for percentages) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||
| Selling, general and administration expense | $ | 1,629 | $ | 5,207 | $ | 11,230 | $ | 19,707 | ||||||||
| Selling, general and administration expense as a % of revenues | 14 | % | 39 | % | 36 | % | 55 | % | ||||||||
S,G&A decreased for the three months ended September 27, 2025 as compared to the three months ended September 28, 2024 primarily due to a decrease in accrued legal expenses of approximately $4.0 million partially offset by an increase in non-cash stock-based compensation of $0.2 million. S,G&A decreased for the nine months ended September 27, 2025 as compared to the nine months ended September 28, 2024 primarily due to a decrease in accrued legal expenses of approximately $9.8 million partially offset by an increase in non-cash stock-based compensation of $0.6 million, professional fees of $0.4 million, and labor costs of $0.4 million.
Litigation Damages. Litigation damages of $24.8 million were accrued as of September 28, 2024 as a result of the April 22, 2024 jury verdict that was entered against the Company. On September 5, 2025, Kopin received a judgment from the courts in the BlueRadios litigation awarding BlueRadios $19.7 million in damages but denying a permanent injunction and prejudgment interest. This most recent judgment also provides for the accrual of interest of less than $0.1 million per month until final settlement. As a result, the accrued litigation damages were reduced by $5.1 million in the three months ended September 27, 2025. We also recognized approximately $0.1 million of litigation damages related to the interest on the judgment in the three months ended September 27, 2025.
Other Expense, net. Other expense, net, is primarily composed of interest income, foreign currency transactions, gains on fair value recording of investments and remeasurement gains and losses incurred by our U.K.-based subsidiary and other non-operating income items. Other expense, net, for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| (In thousands) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||
| Other (expense) income, net | $ | (401 | ) | $ | (535 | ) | $ | 793 | $ | (907 | ) | |||||
During the nine months ended September 27, 2025, we sold an investment for a gain of approximately $0.3 million. Interest income increased by less than $0.1 million and approximately $0.4 million for the three and nine months ended September 27, 2025, respectively, as compared to the three and nine months ended September 28, 2024. During the three and nine months ended September 27, 2025, we recorded foreign currency losses of approximately $0.2 and less than $0.1 million, respectively. During the three and nine months ended September 28, 2024, we recorded foreign currency gains of $0.1 million and less than $0.1 million, respectively. Other (expense) income, net includes $0.5 and $1.6 million of impairment losses on equity investments for the nine months ended September 27, 2025 and September 28, 2024, respectively.
Tax Provision. We recorded a provision for income taxes of less than $0.1 million and approximately $0.2 million in the three and nine months ended September 27, 2025, respectively. We recorded a provision for income taxes of approximately $0.1 million in the three and nine months ended September 28, 2024
Net Income (Loss). Net income of $4.1 million and net losses of $4.2 million during the three and nine months ended September 27, 2025, respectively, compared to net losses of $3.5 million and $41.9 million during the three and nine months ended September 28, 2024, respectively. The increase in net income during the three months ended September 27, 2025 compared to the three months ended September 28, 2024 was primarily due to the reduction of the accrued litigation damages and legal fees. The decrease in net loss during the nine months ended September 27, 2025 compared to the nine months ended September 28, 2024 was primarily due to accrued litigation damages and legal fees.
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Liquidity and Capital Resources
At September 27, 2025 and December 28, 2024, we had cash and cash equivalents, including restricted cash, and marketable securities of $27.6 million and working capital of $16.9 million compared to $36.6 million and $18.9 million, respectively.
| Nine Months Ended | Nine Months Ended | |||||||
| September 27, 2025 | September 28, 2024 | |||||||
| Net cash used for operating activities | $ | (7,683,203 | ) | $ | (12,640,553 | ) | ||
| Net cash from (used in) investing activities | 20,183,453 | (10,434,050 | ) | |||||
| Net cash (used in) provided by financing activities | (154,706 | ) | 32,439,631 | |||||
| Effect of exchange rate changes on cash | 2,476 | 4,880 | ||||||
| Increase in cash and equivalents | $ | 12,348,020 | $ | 9,369,908 | ||||
The increase in cash, cash equivalents, and restricted cash for the nine months ended September 27, 2025 was primarily due to proceeds from the sales of marketable securities of $36.4 million partially offset by purchases of marketable securities of $15.2 million, cash used in operations of $7.7 million, capital expenditures of $1.3 million and proceeds from the sale of an equity investment of $0.3 million. The increase in cash, cash equivalents, and restricted cash for the three months ended September 28, 2024 was primarily due to proceeds from the sale of common stock and pre-funded warrants of $32.4 million and marketable securities of $6.9 million partially offset by purchases of marketable securities of $16.9 million, cash used in operations of $12.6 million, and capital expenditures of $0.3 million. For the nine months ended September 27, 2025, cash used in operating activities consisted of a net loss of $4.2 million, net cash used to fund changes in operating assets and liabilities of $3.0 million, and non-cash charges totaling $0.5 million, which was primarily related to accrued litigation damages offset by stock-based compensation, inventory reserves, depreciation, and investment impairment net of unrealized gains. For the nine months ended September 28, 2024, cash used in operating activities consisted of a net loss from operations of $41.9 million and net cash provided by changes in operating assets and liabilities of $1.9 million partially offset by non-cash charges totaling $31.2 million, which was primarily related to accrued litigation damages, stock-based compensation, investment impairment net of unrealized gains, inventory reserves, and depreciation. We expect that net cash used for or provided by operating activities to fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results, the timing of when we recognize revenue, and changes in components of working capital. Our cash and cash equivalents and liquidity could be adversely affected by any amounts that become payable in connection with any adverse results from any litigation we are, or may become, involved in.
Equity offerings
On September 30, 2024, we sold 2,405,000 shares of common stock and received gross proceeds of $1.6 million.
On September 23, 2024, we sold 37,550,000 shares of common stock at a public offering price of $0.65 per share. In addition, in lieu of common stock to certain investors, we offered pre-funded warrants to purchase 4,000,000 shares of our common stock at a purchase price of $0.64 per pre-funded warrant, which equals the public offering price per share of the common stock less the $0.01 exercise price per share of each pre-funded warrant. We received gross proceeds of $27.0 million before deducting underwriting discounts and offering expenses paid by us of $1.8 million. In addition, we granted the underwriters a 30-day option to purchase up to an additional 6,232,500 shares of common stock at the public offering price, less underwriting discounts and commissions.
At-the-market offerings
During the three months ended March 30, 2024, we sold 3,080,000 shares of common stock for gross proceeds of $7,466,755 (average of $2.42 per share) before deducting broker expenses paid by us of approximately $0.2 million, pursuant to our then effective At-The-Market Equity Offering Sales Agreement, dated as of March 5, 2021 (the “ATM Agreement”) with Stifel, Nicolaus & Company, Incorporated (“Stifel”), as agent. The ATM Agreement terminated in the three months ended September 28, 2024. On January 24, 2025, the Company entered into a new At-The-Market Equity Offering Sales Agreement with Stifel, Nicolaus & Company, Incorporated (“Stifel”), as agent, for the sale of up to $50 million of securities. Subsequent to April 13, 2025, the Company cannot use the At-The-Market Equity Offering Sales Agreement entered into on January 24, 2025 until such time the Company can utilize Form S-3.
On September 29, 2025, the Company announced that it had entered into a securities purchase agreement (the “Purchase Agreement”) for a private investment in public equity financing (the “PIPE”) for 19,545,950 shares of its common stock, par value $0.01 per share (the “Shares”). The net proceeds to the Company from the offering were estimated to be approximately $38.1 million, after deducting placement agent fees and commissions and estimated offering expenses payable by the Company. The transaction was consummated on September 30, 2025.
As described in Note 14. Litigation, on September 5, 2025, a post-trial order was entered in the U.S. District Court for the District of Colorado in the matter of BlueRadios, Inc. v. Kopin Corporation, Inc. finding for the plaintiff, BlueRadios, Inc. and awarding approximately $19.7 million in damages but denying a permanent injunction and prejudgment interest. In the second quarter of 2024, the Company had estimated and accrued $24.8 million in probable and reasonably estimable damages for this matter. As a result of the post-trial order, the Company reduced the accrual to $19.7 million and recognized a benefit of $5.1 million for the reduction in the accrual in the condensed consolidated Statements of Operations for the three and nine months ended September 27, 2025. On October 2, 2025, the Company posted a supersedeas bond for the amount of $23.0 million which consisted of the $19.7 million judgement, legal expenses, and interest that would accrue over the expected term of the appeal. To post the bond the Company entered into loan agreements (the “Agreements”) with its bank which provides the bank with a security interest in the $23.0 million the Company deposited with the bank. This $23.0 million is to be classified as Restricted Cash. The bank then issued a Letter of Credit (LOC) to a surety company who then issued the bond to the court. The Agreement provides for standard representations and warranties and allows the bank to use the $23.0 million to satisfy the LOC in the event the LOC is called. As of September 27, 2025, the Company has accrued $19.7 million for the judgment within Accrued litigation liability and has accrued approximately $0.1 million in related interest within Other accrued liabilities. On October 7, 2025, the Company filed an appeal of the $19.7 million judgement against the Company in the matter of Blue Radios Inc. v. Kopin Corporation. As of September 27, 2025, the Company has accrued $19.7 million for the judgment within Accrued litigation liability and has accrued approximately $0.1 million in related interest within Other accrued liabilities.
On October 16, 2025, the Company announced that a $15 million strategic investment from Theon International Plc had been completed. Under the terms of the Agreements, Theon acquired a 49% interest in Kopin’s subsidiary, Kopin Europe Ltd. for $8.0 million and the parties entered into a licensing and development agreement and funding agreements relating to the joint development of military products. In addition, Theon purchased $7.0 million worth of shares of Series A Convertible Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”). Each share of the Preferred Stock is convertible into shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”) at an initial fixed conversion price of $3.00 per share, pursuant to the terms of the Certificate of Designation for Series A Convertible Preferred Stock of the Company (the “Certificate of Designations”). Kopin will have the ability to force the conversion of the preferred stock into common stock once Kopin’s common stock trades at $5.50 per share or higher for 10 Trading Days (as defined in the Certificate of Designation) within a 30 consecutive Trading Day period. The Preferred Stock will carry an annual dividend of at the base rate dividend rate of 4%, 2% payable in cash and 2% payable in stock.
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We expect to continue to incur significant operating losses and negative cash flow from operations in the foreseeable future. Inclusive within the financial statements for the year ended December 28, 2024 and for the three and six months ended June 28, 2025 we experienced negative cash flow from operation and had limited liquidity resources which has led us to conclude that there was substantial doubt about the Company’s ability to continue as a going concern. After the bond related to the Blue Radios, Inc. v. Kopin Corporation, Inc. judgment, we were able to achieve sufficient financing from the PIPE so that liquidity, financial condition, and business projects will be funded. Therefore, we have concluded that the Company will be able to continue as a going concern for at least the next twelve months from the issuance of these financial statements.
The following table presents the components of our cash, cash equivalents, restricted cash and marketable securities held in U.S. dollars as of the dates presented:
| September 27, 2025 | December 28, 2024 | |||||||
| Domestic locations | $ | 27,424,773 | $ | 36,491,339 | ||||
| Foreign locations | 19,686 | 56,984 | ||||||
| Subtotal cash, cash equivalents, restricted cash and marketable securities held in U.S. dollars | 27,444,459 | 36,548,323 | ||||||
| Cash and cash equivalents held in other currencies and converted to U.S. dollars | 113,681 | 81,455 | ||||||
| Total cash, cash equivalents, restricted cash and marketable securities | $ | 27,558,140 | $ | 36,629,778 | ||||
As discussed in Note 16. Subsequent Events, $23.0 million of the Company’s cash balance is to be classified as Restricted Cash.
We have no plans to repatriate the cash and cash equivalents held in our foreign subsidiary KEL.
The manufacturing operations at our Korean facility, Kowon, have ceased and Kowon was liquidated at fiscal year ended 2018. We have recorded deferred tax liabilities for any additional withholding tax that may be due to the Korean government upon Kowon’s final tax return acceptance.
We expect to expend between $1.0 million and $2.0 million on capital expenditures in 2025.
Critical Accounting Estimates
Our critical accounting estimates are described in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition” of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, as amended. There have been no material changes to our critical accounting policies and estimates since December 28, 2024.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
We invest our excess cash in high-quality U.S. Government, government-backed (e.g., Fannie Mae, FDIC guaranteed bonds and certificates of deposit) and corporate debt instruments, which bear lower levels of relative risk. We believe that the effect, if any, of reasonably possible near-term changes in interest rates on our financial position, results of operations and cash flows should not be material to our cash flows or income. It is possible that interest rate movements would increase our unrealized gain or loss on debt securities. We are exposed to changes in foreign currency exchange rates primarily through our translation of our foreign subsidiaries’ financial position, results of operations, and transaction gains and losses as a result of non-U.S. dollar denominated cash flows related to business activities in Europe, and remeasurement of U.S. dollars to the British pound, the functional currency of our U.K. subsidiaries. We are also exposed to the effects of exchange rates in the purchase of certain raw materials, which are in U.S. dollars. We do not currently hedge our foreign currency exchange rate risk. We estimate that any market risk associated with our international operations or investments is unlikely to have a material adverse effect on our business, financial condition or results of operation. Our portfolio of marketable securities is subject to interest rate risk and the credit rating of our investments may be affected by the underlying financial health of the guarantors of our investments. We use silicon wafers but do not enter into forward or futures hedging contracts to mitigate against risks related to the price of silicon.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of September 27, 2025, the Company conducted an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial officer, respectively) regarding the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 27, 2025, as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The term “disclosure controls and procedures” means controls and other procedures that are designed to ensure that information required to be disclosed by the Company in reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the requisite time periods and that such disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act are accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our management concluded that, as of September 27, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level as of September 27, 2025 due to the following material weaknesses which were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 28, 2024, as amended, and continue to exist as of September 27, 2025.
We identified control deficiencies, that when aggregated, constitute material weaknesses as follows:
| ● | Design and operating effectiveness of information technology general computer controls in the areas of user access and program change-management for certain information technology systems that are critical to capturing, processing, and reporting financial transactions. These ineffective information technology controls contributed to (i) improper segregation of duties among certain business process controls and (ii) ineffective data validation of spreadsheets and system-generated reports. | |
| ● | Management did not design, implement and retain appropriate documentation of control procedures to achieve timely, complete and accurate recording and disclosures across multiple financial statement areas including accounting and disclosure of stockholder’s equity, share-based compensation, certain other receivables, accruals, and certain investments, including insufficient review controls around completeness and accuracy of information produced by the entity and documentation of evidence of reviews. | |
| ● | Management did not design, implement and retain appropriate documentation of certain business process controls related to the revenue cycle, including insufficient review controls around completeness and accuracy of information produced by the entity including, certain costs incurred, estimates to complete, and documentation of evidence of contract accounting reviews. |
Remediation Activities
Management is actively engaged in the implementation of a remediation plan to implement measures designed to improve our internal control over financial reporting to remediate these material weaknesses with oversight from the Audit Committee of the Board of Directors.
Changes in Internal Control over Financial Reporting
Other than the changes discussed above in connection with the changes designed and implemented as a result of our remediation plan of the previously identified material weaknesses, there have been no changes in the Company’s internal control over financial reporting that occurred during the quarter ended September 27, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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Part II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company may engage in legal proceedings arising in the ordinary course of business. Claims, suits, investigations and proceedings are inherently uncertain and it is not possible to predict the ultimate outcome of such matters and our business, financial condition, results of operations or cash flows could be affected in any particular period.
BlueRadios, Inc. v. Kopin Corporation, Civil Action No. 16-02052-JLK (D. Col.):
On August 12, 2016, BlueRadios, Inc. (“BlueRadios”) filed a complaint in the U.S. District Court for the District of Colorado, alleging that the Company breached a contract between it and BlueRadios concerning a joint venture between the Company and BlueRadios to design, develop and commercialize micro-display products with embedded wireless technology referred to as “Golden-i,” breached the covenant of good faith and fair dealing associated with that contract, breached its fiduciary duty to BlueRadios, and misappropriated trade secrets owned by BlueRadios in violation of Colorado law (C.R.S. § 7-74-104(4)) and the Defend Trade Secrets Act (18 U.S.C. § 1836(b)(1)). BlueRadios further alleged that the Company was unjustly enriched by its alleged misconduct, BlueRadios is entitled to an accounting to determine the amount of profits obtained by the Company as a result of its alleged misconduct, and the inventorship on at least ten patents or patent applications owned by the Company need to be corrected to list BlueRadios’ employees as inventors and thereby list BlueRadios as co-assignees of the patents. BlueRadios seeks monetary, declaratory, and injunctive relief, including for alleged non-payment of engineering retainer fees.
On October 11, 2016, the Company filed its Answer and Affirmative Defenses. The parties completed expert depositions on November 15, 2019. On July 30, 2019, the Court granted Kopin partial summary judgment on BlueRadios’ claim for breach of a contractual obligation to pay a $35,000 monthly retainer. On December 2, 2019, the Company filed a Motion for Partial Summary Judgment requesting the Court dismiss counts 2-7 in their entirety and counts 1 and 8 in part. BlueRadios also filed a Motion for Partial Summary Judgment alleging it is the co-owner of U.S. Patent No. 8,909,296. Responses to the Motions for Partial Summary Judgment were filed on January 15, 2020, and replies were filed on February 19, 2020. On September 25, 2020, the Court denied BlueRadios’ Motion for Partial Summary Judgment. On August 3, 2022, the Court granted the Company’s Motion for Partial Summary Judgment by dismissing counts 3, 6, 7, the claim for punitive damages under count 2, and count 8 as it relates to patent applications and by denying the motion as it relates to counts 1, 4, and 5, and the remainder of counts 2 and 8. The Court also ordered discovery reopened for certain limited purposes. A trial date was set by the Court for January 22, 2024 to February 5, 2024 but then re-scheduled for March 20, 2024 to April 16, 2024. On Monday, April 22, 2024, after a four week trial, a jury verdict was entered finding for BlueRadios and awarding approximately $5.1 million in damages as well as recommending $19.7 million in disgorgement and exemplary damages. While no final judgment has been issued by the Court, the Court will take that recommendation under advisement and will rule in its final judgment on the final amount after post-trial briefing. On May 22, 2024, the Company filed its Motion for Judgment as a Matter of Law or in the alternative for a New Trial, as well as two submissions arguing that the disgorgement and exemplary damages should not be awarded. That same day, BlueRadios filed motions seeking a permanent injunction prohibiting Kopin from selling any products that incorporate BlueRadios’ trade secrets, over $10.8 million in pre-judgment interest, and over $10.2 million in attorneys’ fees and costs. Briefing on those issues concluded on June 26, 2024. On September 25, 2024, the Company filed a supplemental brief on issue preclusion arguing that BlueRadios’ claims were untimely because of findings of fact made in BlueRadios, Inc. v. Hamilton, Brook, Smith & Reynolds, P.C., No. 1:21-cv-10488-DJC, ECF 268 (D. Mass. Sept. 18, 2024). That supplemental briefing concluded on October 29, 2024.
On September 5, 2025, the Court entered final judgment against the Company, awarding approximately $19.7 million in damages but denying BlueRadios’ motion for a permanent injunction. The Company posted a supersedeas bond to stay execution on the judgment of $23 million. The Company has appealed to the U.S. Court of Appeals for the Federal Circuit. BlueRadios has cross-appealed the Court’s denial of its motion for a permanent injunction and the Court’s July 30, 2019 and August 3, 2022 partial summary judgment orders. The company expects the appeal to conclude by mid-2027.
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Item 1A. Risk Factors
Our business and financial results are subject to numerous risks and uncertainties. As a result, the risks and uncertainties discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, as amended should be carefully considered. With the exception of the Company no longer having substantial doubt about the ability to continue as a going concern for the next twelve months from the issuance of these financial statements, there have been no material changes in the assessment of our risk factors from those set forth in our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, as amended, and other filings we make with the Securities and Exchange Commission.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On October 16, 2025, the compensation committee (the “Compensation Committee”) of our Board of Directors approved a grant of an inducement equity award of 400,000 restricted shares to Erich Manz, the Company’s Chief Financial Officer, in connection with his hiring. 25% of the restricted shares will vest on each December 10 beginning in 2026, subject to Mr. Manz’s continued employment with Kopin on the applicable vesting date.
The above award was granted in accordance with Nasdaq Listing Rule 5635(c)(4) as a material inducement to the above individuals’ entry into employment with us. The above award was issued in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, on the basis that they did not involve a public offering.
Other than as stated above, we did not sell any shares of our common stock, shares of our preferred stock or warrants to purchase shares of our stock, or grant any stock options, restricted stock units or restricted stock awards, during the period covered by this Quarterly Report on Form 10-Q that were not registered under the Securities Act of 1933, as amended and that have not otherwise been described in a Current Report on Form 8-K.
Item 5. Other Information.
Insider Trading Arrangements
During
the quarter ended September 27, 2025, none of our directors or officers
Item 6. Exhibits
| Exhibit No. | Description | |
| 3.1 | Amended and Restated Certificate of Incorporation of the Company (Filed as an exhibit to Registration Statement on Form S-1, File No. 33-57450, and incorporated herein by reference.) | |
| 3.2 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 30, 2025) | |
| 3.3 | Revised Certificate of Designation of Series A Convertible Preferred Stock (Incorporated by reference to Exhibit 3.6 to the Company’s Current Report on Form S-1 filed on November 6, 2025) | |
| 10.1*** | Inducement Restricted Stock Agreement dated September 4, 2025 between Kopin Corporation and Erich Manz (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 5, 2025) | |
| 10.2+ | Securities Purchase Agreement, dated as of September 29, 2025, by and among Kopin Corporation and the Purchasers (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 30, 2025) | |
| 10.3 | Registration Rights Agreement, dated as of September 29, 2025, by and among Kopin Corporation and the Purchasers (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 30, 2025) | |
| 10.4 | Loan Agreement, dated as of October 2, 2025 by and among the Company, Kopin Targeting Corporation and Rockland Trust Company (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 10, 2025) | |
| 10.5 | Continuing Reimbursement Agreement for Letters of Credit dated as of October 2, 2025 by and among the Company and Rockland Trust Company (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 10, 2025) | |
| 10.6+ | Shareholders’ Agreement in Relationship to Kopin Europe Limited, dated October 16, 2025, by and among Kopin Corporation, Theon International PLC, and Kopin Europe Limited. (Incorporated by reference to Exhibit 10.23 to the Company’s Current Report on Form S-1 filed on November 7, 2025) | |
| 10.7+ | Subscription Agreement Relating to Kopin Europe Limited, dated August 8, 2025, by and among Theon International PLC, Kopin Europe Limited and Kopin Corporation. (Incorporated by reference to Exhibit 10.24 to the Company’s Current Report on Form S-1 filed on November 7, 2025) | |
| 10.8+ | Series A Convertible Preferred Stock Purchase Agreement, dated August 8, 2025, by and between Kopin Corporation and Theon International PLC. (Incorporated by reference to Exhibit 10.25 to the Company’s Current Report on Form S-1 filed on November 7, 2025) | |
| 10.9+ | First Amendment to Series A Convertible Preferred Stock Purchase Agreement, dated September 30, 2025, by and between Kopin Corporation and Theon International PLC. (Incorporated by reference to Exhibit 10.26 to the Company’s Current Report on Form S-1 filed on November 7, 2025) | |
| 10.10+ | License and Collaboration Agreement, dated October 16, 2025, by and among Kopin Corporation, Theon International PLC, and Kopin Europe Limited. (Incorporated by reference to Exhibit 10.27 to the Company’s Current Report on Form S-1 filed on November 7, 2025) | |
| 31.1 | Certification of Michael Murray, Chief Executive Officer, filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) * | |
| 31.2 | Certification of Erich Manz, Chief Financial Officer, filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) * | |
| 32.1 | Certification of Michael Murray, Chief Executive Officer, furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) ** | |
| 32.2 | Certification of Erich Manz, Chief Financial Officer, furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) ** | |
| 101.INS | Inline XBRL Instance Document* | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document* | |
| 101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document* | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | |
| 101.LAB | Inline XBRL Taxonomy Label Linkbase Document* | |
| 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document* | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Submitted electronically herewith |
| ** | Furnished and not filed herewith |
| *** | Management contract or compensatory plan or arrangement. |
| + | The annexes schedules, and certain exhibits to this Exhibit have been omitted pursuant to Item 601(b)(2) of regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request. |
Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at September 27, 2025 (Unaudited) and December 28, 2024, (ii) Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 27, 2025 and September 28, 2024, (iii) Condensed Consolidated Statement of Comprehensive Loss (Unaudited) for the three and nine months ended September 27, 2025 and September 28, 2024, (iv) Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the three and nine months ended September 27, 2025 and September 28, 2024, (v) Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 27, 2025 and September 28, 2024, and (vi) Notes to Unaudited Condensed Consolidated Financial Statements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| KOPIN
CORPORATION (Registrant) | ||
| Date: November 12, 2025 | By: | /S/ MICHAEL MURRAY |
| Michael Murray | ||
| President, Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: November 12, 2025 | By: | /S/ ERICH MANZ |
| Erich Manz | ||
| Treasurer and Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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FAQ
What were KOPN's Q3 2025 revenues and earnings?
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