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What changed in KOPIN CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of KOPIN CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+278 added−256 removedSource: 10-K (2026-04-13) vs 10-K (2025-04-17)

Top changes in KOPIN CORP's 2025 10-K

278 paragraphs added · 256 removed · 197 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

63 edited+19 added−12 removed67 unchanged
Biggest changeWe acquired a right to an equity interest in a medical device company in 2021. As of December 28, 2024, the carrying value of this investment is $0.3 million. As of December 28, 2024, we own 100% of the outstanding common stock of Kopin Virginia, Inc. (formerly NVIS, Inc), KEL, and e-MDT America Inc.
Biggest changeAs of December 27, 2025, we have approximately 10% interest in this investment and the carrying value of our investment is $1.5 million. 11 We acquired the right to an equity interest in HMDmd, a medical device company in 2021. As of December 27, 2025, the carrying value of this investment is $0.3 million.
Technological edge allows us to develop products that are not only high-resolution and low power but also rugged enough for defense applications, such as pilot helmets and armored vehicle targeting systems. The Company’s competitive edge is further strengthened by our focus on application-specific solutions, which cater to the unique requirements of each market segment.
Our technological edge allows us to develop products that are not only high-resolution and low power but also rugged enough for defense applications, such as pilot helmets and armored vehicle targeting systems. The Company’s competitive edge is further strengthened by our focus on application-specific solutions, which cater to the unique requirements of each market segment.
The display system is being designed to utilize software and AI accelerating algorithms to adjust the display image and thereby reduce nausea, latency, and overall system weight which will increase user comfort and battery life. 7 Product Offerings and Applications Our products are utilized across multiple sectors, each with specific applications: ● Defense: Currently includes thermal weapon rifle sights, fixed and rotary wing pilot helmets and training and simulation headsets and are designed for armored vehicle targeting systems and soldier deployed missile systems.
The display system is being designed to utilize software and AI, accelerating algorithms to adjust the display image and thereby reduce nausea, latency, and overall system weight which will increase user comfort and battery life. 7 Product Offerings and Applications Our products are utilized across multiple sectors, each with specific applications: ● Defense: Currently it includes thermal weapon rifle sights, fixed and rotary wing pilot helmets and training and simulation headsets and are designed for armored vehicle targeting systems and soldier deployed missile systems.
Competitive Edge A critical aspect of our business is our ability to offer tailored and complete solutions, not just displays, which differentiate us from competitors. We offer active-matrix liquid crystal, organic light emitting diode, ferroelectic liquid crystal on silicon and inorganic light emitting diode microdisplays as stand-alone products and in modules and subassemblies which include our optics and electronics.
Competitive Edge A critical aspect of our business is our ability to offer tailored and complete solutions, not just displays, which differentiate us from competitors. We offer active-matrix liquid crystal, organic light emitting diode, ferroelectic liquid crystal on silicon and organic light emitting diode microdisplays as stand-alone products and in modules and subassemblies which include our optics and electronics.
Any failure on our part to obtain any required licenses for the export of technical data and/or export of our products, or to otherwise comply with ITAR, could subject us to significant future liabilities. 11 We are also subject to federal importation laws that regulate the importation of raw materials and equipment from other nations that are used in our products.
Any failure on our part to obtain any required licenses for the export of technical data and/or export of our products, or to otherwise comply with ITAR, could subject us to significant future liabilities. We are also subject to federal importation laws that regulate the importation of raw materials and equipment from other nations that are used in our products.
These third-party consultants are assisting us in creating an ESG materiality assessment from which we can develop a baseline assessment for monitoring our progress. Our progress in creating our ESG strategy and other related activities are reported to the Board of Directors.
These third-party consultants are assisting us in creating an ESG materiality assessment from which we can develop a baseline assessment for monitoring our progress. Our progress in creating our ESG strategy and other related activities is reported to the Board of Directors.
These applications require displays and subassemblies that are manufactured to exact specifications so that they can endure extreme conditions, such as repetitive shock and vibration. ● Industrial: Focuses on 3D automated optical inspection (3D AOI) systems that use our displays as spatial light modulators. 3D AOI are quality control systems used in production lines that manufacture products such as cell phones.
These applications require displays and subassemblies that are manufactured to exact specifications so that they can endure extreme conditions, such as repetitive shock and vibration. ● Industrial: Focuses on 3D automated optical inspection (“3D AOI”) systems that use our displays as spatial light modulators. 3D AOI are quality control systems used in production lines that manufacture products such as cell phones.
These products are critical for applications ranging from weapon mounted thermal sights to spatial computing devices and medical headsets. We have been supplying our microdisplays and ASOS to the U.S. Department of Defense for many years for solider centric systems, rotary and fixed wing aircraft and are developing products for armored vehicles and soldier carried missile systems.
These products are critical for applications ranging from weapon mounted thermal sights to spatial computing devices and medical headsets. We have been supplying our microdisplays and ASOS to the U.S. Department of War for many years for solider centric systems, rotary and fixed wing aircraft and are developing products for armored vehicles and soldier carried missile systems.
Display Technology: o The demand for higher performance is evident, with a need for displays offering superior resolution, brightness, and field of view. Emerging technologies such as MicroLED and next-generation OLED are at the forefront, providing high contrast and energy efficiency. For example, MicroLED’s potential for high brightness makes it suitable for outdoor AR applications.
Display Technology: ○ The demand for higher performance is evident, with a need for displays offering superior resolution, brightness, and field of view. Emerging technologies such as MicroLED, next-generation OLED and Color MicroLED are at the forefront, providing high contrast and energy efficiency. For example, MicroLED’s potential for high brightness makes it suitable for outdoor AR applications.
Detailed Analysis of Kopin Corporation’s Technology and Market Position Kopin Corporation, a leader in optical solutions, is recognized for our advanced microdisplay technologies and related products, catering to defense, industrial, medical, and emerging consumer AR and VR markets. This analysis, prepared as of March 2025, provides a comprehensive overview of the Company’s technology, products, strategy, and market position.
Detailed Analysis of Kopin Corporation’s Technology and Market Position Kopin Corporation, a leader in optical solutions, is recognized for our advanced microdisplay technologies and related products, catering to defense, industrial, medical, and emerging consumer AR and VR markets. This analysis, prepared as of March 2026, provides a comprehensive overview of the Company’s technology, products, strategy, and market position.
In addition to unifying our operations, we have also expanded and unified our sales and business development team, substantially increasing our investment in new customer acquisition, existing customer revenue and margin enhancement, and diversification of our customer base. In the defense, medical and industrial segments that we serve, product development cycles and transitions from development to manufacturing are lengthy.
In addition to unifying our operations, we have also expanded and unified our sales and business development team, substantially increasing our investment in new customer acquisitions, existing customer revenue and margin enhancement, and diversification of our customer base. In the defense, medical and industrial segments that we serve, product development cycles and transitions from development to manufacturing are lengthy.
Our unique position as the only known USA-based provider offering AMLCDs, LCOS, OLED and MicroOLED Displays, combined with optics, enhances our ability to offer the market the best solution for each unique application, serving customers based on their specific needs. This is a significant competitive advantage for us.
Our unique position as the only known USA-based provider offering AMLCDs, LCOS, OLED and MicroOLED Displays, combined with optics, enhances our ability to offer the market a leading solution for each unique application, serving customers based on their specific needs. This is a significant competitive advantage for us.
LCOS displays, manufactured by our subsidiary Kopin Europe Limited (“KEL”) in Scotland, are reflective and used in 3D optical inspection equipment, offering high-speed, high-density imaging capabilities. OLED displays, with their emissive nature, provide high contrast and fast response times, making them ideal for AR and VR applications.
LCOS displays, manufactured by Kopin Europe Limited (“KEL”) in Scotland, are reflective and used in 3D optical inspection equipment, offering high-speed, high-density imaging capabilities. OLED displays, with their emissive nature, provide high contrast and fast response times, making them ideal for AR and VR applications.
Our market reach now extends globally, with significant operations in the Americas, Asia-Pacific, and Europe. This global footprint and strategic focus underscore our capability to serve diverse and demanding markets, particularly in defense, where it supports both U.S. and international customers with development and production programs.
Our market reach now extends globally, with significant operations in the Americas, Asia-Pacific, and Europe. This global footprint and strategic focus underscores our capability to serve diverse and demanding markets, particularly in defense, where it supports both U.S. and international customers with development and production programs.
We are seeing significant interest for our headset system in this emerging area among both surgeons and though our partnerships with the leading surgical/optical equipment providers. ● Consumer Sector: The consumer market has seen significant activity, driven by products such as Apple’s Vision Pro, released in 2024, and other VR headsets such as Oculus.
We are seeing significant interest in our headset system in this emerging area among both surgeons and through our partnerships with the leading surgical/optical equipment providers. ● Consumer Sector: The consumer market has seen significant activity, driven by products such as Apple’s Vision Pro, released in 2024, and other VR headsets such as Oculus.
Revenue Streams and Market Opportunities Revenue generation derives primarily from the sale of displays, optical components, and Application Specific Optical Solutions (ASOS) that we manufacture for defense, industrial, medical and training and simulation applications, alongside customer-funded development contracts for U.S. defense programs. This dual revenue stream ensures stability and growth potential.
Revenue Streams and Market Opportunities Revenue generation derives primarily from the sale of displays, optical components, and ASOS that we manufacture for defense, industrial, medical and training and simulation applications, alongside customer-funded development contracts for U.S. defense programs. This dual revenue stream ensures stability and growth potential.
Furthermore, we believe we are the only USA based, small business that offers five variants of microdisplay technologies which provide a vast array of technological options for customers’ application needs. A “small business” as defined in U.S. procurement may receive preferential treatment in awarding contracts.
Furthermore, we believe we are the only small domestic business that offers five variants of microdisplay technologies which provide a vast array of technological options for customers’ application needs. A “small business” as defined in U.S. procurement may receive preferential treatment in awarding contracts.
Product Portfolio and Technological Edge Our product lineup is diverse, with four microdisplay technologies inclusive of both off-the-shelf and custom products, as well as complete headset solutions for training & simulation and medical applications, and ASOS sub-systems. Manufacturing processes vary.
Product Portfolio and Technological Edge Our product lineup is diverse, with four micro-display technologies inclusive of both off-the-shelf and custom products, as well as complete headset solutions for training & simulation and medical applications, and ASOS sub-systems. Manufacturing processes vary.
Key risks include dependence on major customers, such as DRS Network & Imaging Systems LLC comprising 65% of revenues in 2024 and therefore posing a concentration risk. The need for continuous innovation in a rapidly evolving technology market and managing complex supply chains to maintain high production yields for defense subassemblies are additional challenges.
Key risks include dependence on major customers, such as DRS Network & Imaging Systems LLC comprising 63% of revenues in 2025 and therefore posing a concentration risk. The need for continuous innovation in a rapidly evolving technology market and managing complex supply chains to maintain high production yields for defense subassemblies are additional challenges.
In conjunction with our portfolio of unique microdisplays and ASOS, we have also invested heavily in our sales and business development group – nearly doubling the resources focused on acquisition of new customers and programs over the past 18 months.
In conjunction with our portfolio of unique microdisplays and ASOS, we have also invested in our sales and business development group – nearly doubling the resources focused on acquisition of new customers and programs over the past 12 months.
Government agencies and entities, including but not limited to branches of the Department of Defense (“DoD”). U.S. defense contractors are among our largest customers, representing a substantial majority of our total revenues. The U.S.
Government agencies and entities, including but not limited to branches of the Department of War (“DoW”). U.S. defense contractors are among our largest customers, representing a substantial majority of our total revenues. The U.S.
Consistent with the Organization for Economic Co-operation and Development Due Diligence Guidance concerning conflict minerals, we adopted the Conflict-Free Sourcing Initiative Due Diligence reporting process and seek to obtain conflict minerals content declarations from our suppliers each year, all in an effort to promote supply chain transparency.
Consistent with the Organization for Economic Co-operation and Development Due Diligence Guidance concerning conflict minerals, we adopted the Conflict-Free Sourcing Initiative Due Diligence reporting process and seek to obtain conflict minerals content declarations from our suppliers each year, to promote supply chain transparency.
Most of the programs designed for these market segments tend to run for extended time periods, yielding multiple years of revenue and margin streams. We are particularly well-positioned for the emerging augmented reality (AR) and virtual reality (VR) markets, leveraging our technology and intellectual property.
Most of the programs designed for these market segments tend to run for extended time periods, potentially yielding multiple years of revenue and margin streams. We are particularly well-positioned for the emerging augmented reality (“AR”) and virtual reality (“VR”) markets, leveraging our technology and intellectual property.
Our ability to meet specific customer needs is enhanced by our proprietary technologies, which include over 200 patents and patent applications covering microdisplays, optics, and related systems, providing a significant intellectual property advantage, as noted in recent patent filings.
Our ability to meet specific customer needs is enhanced by our proprietary technologies, which include over 200 patents and patent applications covering microdisplays, optics, and related systems, providing a significant intellectual property advantage.
Similarly, in the medical field our stereoscopic 3D high-resolution headset is used by surgeons to provide comfortable and convenient visual support with more comfort and convenience. 4 ONE Kopin Strategic Initiative and Rebranding In alignment with our “ONE Kopin” strategic initiative, we have undertaken a strategic initiative to reorganize and streamline our operations.
Similarly, in the medical field our stereoscopic 3D high-resolution headset is used by surgeons to provide comfortable and convenient visual support. 4 ONE Kopin Strategic Initiative and Rebranding In alignment with our “ONE Kopin” strategic initiative, we have completed this strategic initiative to reorganize and streamline our operations.
Our portfolio, as evidenced by our official website www.kopin.com, includes four types of miniature active-matrix liquid crystal displays (“AMLCDs”), liquid crystal on silicon (“LCOS”) displays, organic light emitting diode (“OLED”) displays, and emerging micro light emitting diode (“MicroLED”) displays, in addition to optics, electronics, and housings for subsystems which we call Application Specific Optical Solutions (“ASOS”).
Our portfolio includes four types of miniature active-matrix liquid crystal displays (“AMLCDs”), liquid crystal on silicon (“LCOS”) displays, organic light emitting diode (“OLED”) displays, and emerging micro light emitting diode (“MicroLED”) displays, in addition to optics, electronics, and housings for subsystems which we call Application Specific Optical Solutions (“ASOS”).
The fiscal years ended December 28, 2024, December 30, 2023, and December 21, 2022, are referred to herein as fiscal years 2024, 2023 and 2022, respectively. Augmented and Virtual Reality Kopin Corporation, a leader in optical solutions, has expressed views on the future of augmented reality (“AR”) and virtual reality (“VR”) in defense, industrial, and consumer sectors.
The fiscal years ended December 27, 2025 and December 28, 2024, are referred to herein as fiscal years 2025 and 2024, respectively. Augmented and Virtual Reality Kopin, a leader in optical solutions, has expressed views on the future of augmented reality (“AR”) and virtual reality (“VR”) in defense, industrial, and consumer sectors.
Human Capital Resources As of December 28, 2024, our consolidated business employed 181 full-time employees. Of these employees, 3 hold Ph.D. degrees in Material Science, Electrical Engineering or Physics. Our management and professional employees have significant prior experience in semiconductor materials, device transistor and display processing, optical design, manufacturing, and other related technologies.
Human Capital Resources As of December 27, 2025, our consolidated business employed 145 full-time employees in the U.S. Of these employees, 3 hold Ph.D. degrees in Material Science, Electrical Engineering or Physics. Our management and professional employees have significant prior experience in semiconductor materials, device transistor and display processing, optical design, manufacturing, and other related technologies.
These microdisplays and subsystem solutions are all geared toward enhancing human performance when it matters most – in critical applications. Within the reporting period, we announced a patent pending fifth-generation MicroDisplay called NeuralDisplay™ which is in development. The display is a bi-directional, human-in-the-loop and AI enabled backplane that can be manufactured into microdisplays using either OLED or MicroLED deposition technology.
These microdisplays and subsystem solutions are all geared toward enhancing human performance when it matters most – in critical applications. We are developing patent pending fifth-generation MicroDisplay called NeuralDisplay™. The display is a bi-directional, human-in-the-loop and artificial intelligence enabled backplane that can be manufactured into microdisplays using either OLED or MicroLED deposition technology.
For instance: ● Defense Sector: AR and VR are pivotal for training simulations, such as the U.S. Army’s Integrated Visual Augmentation System Next (“IVAS”), which enhances soldier capabilities through real-time data overlays. VR is also used for high-fidelity training in simulated combat environments.
These technologies are viewed as innovative applications and computing platforms, transforming how sectors operate. For instance: ● Defense Sector: AR and VR are pivotal for training simulations, such as the U.S. Army’s Integrated Visual Augmentation System Next (“IVAS”), which enhances soldier capabilities through real-time data overlays. VR is also used for high-fidelity training in simulated combat environments.
In fiscal year 2024, defense sales (excluding R&D contracts) accounted for 82% of total revenue, up from 56% in 2023 and 52% in 2022, indicating a strong reliance on this sector. These results were a by-product of an intentional strategic shift in market focus, which we believe is already proving successful.
In fiscal year 2025, defense sales (excluding R&D contracts) accounted for 74% of total revenue, down from 82% in 2024, but maintaining a strong reliance on this sector. These results were a by-product of an intentional strategic shift in market focus, which we believe is already proving successful.
For additional information, see “Item 1 – Business: Human Capital Resources” in this Form 10-K. 9 We strive to create a workplace based on the following principles and goals: Care for Our People ● We believe in upholding the principles of human rights, worker safety, and observing fair labor practices within our organization. ● We respect different viewpoints and perspectives, and ultimately individual thoughts create innovation and achieve better results.
We strive to create a workplace based on the following principles and goals: Care for Our People ● We believe in upholding the principles of human rights, worker safety, and observing fair labor practices within our organization. ● We respect different viewpoints and perspectives, and ultimately individual thoughts create innovation and achieve better results.
A strategic aspect with regards to geopolitical uncertainties, potential tariffs and sovereign sources of supply for US DoD and European DoD, is our flexibility in manufacturing, using third-party foundries for OLED and MicroLED displays, which reduces capital expenditure and allows for scalability, a strategy not always highlighted in standard overview.
A strategic aspect with regards to geopolitical uncertainties, uncertainties with respect to tariffs and sovereign sources of supply for US DoW and European Department of Defense, is our flexibility in manufacturing, using third-party foundries for OLED and MicroLED displays, which reduces capital expenditure and allows for scalability.
These components are used in defense, industrial, medical, and consumer applications, offering complete solutions that include subassemblies and headsets. Products and Applications Our displays are critical for near-eye applications, such as thermal weapon sights and pilot helmets in defense, wearable headsets for field service in industry, surgeon headsets in medical fields, and spatial computing devices for consumers.
Products and Applications Our displays are critical for near-eye applications, such as thermal weapon sights and pilot helmets in defense, wearable headsets for field service in industry, surgeon headsets in medical fields, and spatial computing devices for consumers.
Government and commercial customers. These contracts help support the continued development of our core technologies. A substantial percentage of our revenue derives from Funded Research and Development, focusing on developing custom product solutions, particularly for the U.S. defense industry.
Government and commercial customers. These contracts help support the continued development of our core and new higher risk technologies which the Company requires either financial or application support to further develop. A substantial percentage of our revenue derives from Funded Research and Development, focusing on developing custom product solutions, particularly for the U.S. defense industry.
Thermal Weapon Sights, Night Vision Goggles (“NVGs”) and integrated helmet systems for pilots, tank gunners and first-person viewers (“FPV”) for drone control are all burgeoning applications. ● Industrial Sector: AR has been adopted for maintenance and repair, allowing workers to access real-time diagrams and remote expert assistance, boosting productivity.
Thermal Weapon Sights, Night Vision Goggles (“NVGs”) and integrated helmet systems for pilots, tank gunners and first-person viewers (“FPV”) for drone control are all burgeoning applications. ● Industrial Sector: AR has been adopted for maintenance and repair, allowing workers to access real-time diagrams and remote expert assistance, boosting productivity. ● Medical Sector: AR headsets offer surgeons significant advantages over the historical arrangement of having multiple monitors in the operating suite.
While microdisplays are at the heart of everything we make, we also bring value to our customers through the design and manufacture of high-performance subsystems of ASOS which include optics, electronics, and housings that are designed to meet the rigorous performance, size, weight, power, and cost requirements of the applications into which they are used.
While microdisplays remain a core competency for Kopin, we also bring value to our customers through the design and manufacture of high-performance subsystems of application-specific solutions (“ASOS”) which include optics, electronics, and housings that are designed to meet the rigorous performance, size, weight, power, and cost requirements of the applications into which they are used.
Advances in lens materials and designs are underway, aiming to reduce weight and improve optical performance. 3. Application Software: o Robust and user-centric application software is vital to unlock the full utility of AR and VR. This includes developing applications for diverse use cases, such as complex defense simulations, industrial maintenance guides, and immersive consumer gaming experiences.
Application Software: ○ Robust and user-centric application software is vital to unlock the full utility of AR and VR. This includes developing applications for diverse use cases, such as complex defense simulations, industrial maintenance guides, and immersive consumer gaming experiences.
This initiative will include a rebranding effort to unify our corporate identity, and as announced in recent corporate updates, includes the introduction of a new logo, corporate identity, and website, reflecting a modernized brand image. Our unified business now operates through various market and technology groups, strategically located across multiple sites to support our global operations.
The initiative included a rebranding effort to unify our corporate identity, and as announced in recent corporate organizational updates. Our unified business now operates through various market and technology groups, strategically located across multiple sites to support our global operations.
Industry Overview and Market Interest We believe, and current trends support, that defense, industrial, and consumer companies are increasingly integrating AR and VR into their operations, which we believe positions us very well for business expansion given our expertise in these technologies. These technologies are viewed as innovative applications and computing platforms, transforming how sectors operate.
Industry Overview and Market Interest We believe, and current trends support, that defense, industrial, and consumer companies are increasingly integrating AR and VR into their operations, which we believe positions us very well for business expansion given our expertise in these technologies. Furthermore, sovereign technology developments are required for USA and NATO customers.
With the growing awareness of environmental and social issues, we are in the process of creating a more formalized ESG strategy. Our initial process for strategy creation includes work by a cross-functional ESG team of leaders representing operations, human resources, supply chain, finance, marketing, and facilities departments. We also utilize third-party facilities, environmental and legal consulting services.
We endeavor to make Kopin Corporation a place people are proud to be associated with. Our initial process for strategy creation includes work by a cross-functional ESG team of leaders representing operations, human resources, supply chain, finance, marketing, and facilities departments. We also utilize third-party facilities, environmental and legal consulting services.
The knowledge gained is leveraged for industrial, medical, and consumer applications, aiming to diversify revenue streams. We maintain a broad intellectual property portfolio, with approximately 200 patents and patent applications, covering microdisplays, optics, and related technologies, which we believe provides a technology and manufacturing platform competitive advantage.
We maintain a broad intellectual property portfolio, with approximately 200 patents and patent applications, covering microdisplays, optics, and related technologies, which we believe provides a technology and manufacturing platform competitive advantage.
AMLCDs involve initial fabrication at Taiwan foundries, with final assembly in Westborough, Massachusetts, using proprietary Wafer Engineering technology. LCOS displays are manufactured at Kopin Europe Limited in Scotland, ensuring localized production capabilities.
AMLCDs involve initial fabrication at Taiwan foundries, with final assembly in Westborough, Massachusetts, using proprietary Wafer Engineering technology while our LCOS displays similarly start with silicon wafers fabricated at Taiwan foundries and are then completed at Kopin Europe Limited in Scotland.
We acquired an equity interest in Lenovo New Vision in the first quarter of 2018 for $1.0 million and the contribution of certain intellectual property. As of December 28, 2024, we have approximately 10% interest in this investment and the carrying value of our investment is $1.5 million.
We acquired an equity interest in Lenovo New Vision in the first quarter of 2018 for $1.0 million and the contribution of certain intellectual property.
We believe that by following the values noted above and doing our part in each of these areas, we can achieve our business objectives and long-term stockholder value.
We believe that by following the values noted above and doing our part in each of these areas, we can achieve our business objectives and long-term stockholder value. For additional information, see “Item 1 – Business: Human Capital Resources” in this Annual Report on Form 10-K.
We believe this patent pending technology will reduce the size, weight, power consumption of consumer and defense AR solutions by reducing several cameras which are required for eye-tracking, gaze, and dynamic brightness and contrast controls.
NeuralDisplay™ architecture is a software-based development focused on integrating bi-directional sensing into the subpixel of either an OLED or MicroLED display. We believe this patent pending technology will reduce the size, weight, power consumption of consumer and defense AR solutions by reducing several cameras which are required for eye-tracking, gaze, and dynamic brightness and contrast controls.
We received a patent for our MicroLED manufacturing process in September 2024, which is expected to enhance production efficiency and reduce costs, positioning the Company for future growth in this emerging technology. NeuralDisplay™ architecture is a software-based development focused on integrating bi-directional sensing into the subpixel of either an OLED or MicroLED display.
We received a patent for our MicroLED manufacturing process in September 2024, which is expected to enhance production efficiency and reduce costs, positioning the Company for future growth in this emerging technology.
These investments may not provide us with any financial return or other benefit, and any losses by these companies or associated losses in our investments may negatively impact on our operating results.
In addition, the wearable computing product market is relatively new and there may be other technologies we need to invest in to enhance our product offering. These investments may not provide us with any financial return or other benefit, and any losses by these companies or associated losses in our investments may negatively impact on our operating results.
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”).
We terminated operations of our subsidiary, Kopin Software Ltd., in the third quarter of 2019 and are in the process of liquidating it. 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”).
Financially, we reported a 25% revenue increase in fiscal year 2024 compared to 2023, driven by defense product sales, and are progressing towards profitability with a reduced net loss, indicating operational improvements, as noted in market analyses.
The Company generally seeks a balance between research and development to low-rate initial production (“LRIP”) sales, with the overall intent of shifting more to LRIP Financially, we reported a 22% revenue decrease in fiscal year 2025 compared to 2024, driven by defense product sales, and are progressing towards profitability with a reduced net loss, indicating operational improvements, as noted in market analyses.
Item 1. Business Overview Corporate Background and Market Presence As used herein, the terms “Company,” “we,” “us,” or “our” refer to Kopin Corporation, a Delaware corporation.
Item 1. Business Overview Corporate Background and Market Presence As used herein, the terms “Company,” “we,” “us,” or “our” refer to Kopin Corporation, a Delaware corporation. Kopin Corporation, a Delaware corporation, incorporated in 1984, and is headquartered in Westborough, Massachusetts, is a leader of innovative microdisplay technologies and optical systems, catering to defense, enterprise, industrial, consumer, and medical sectors.
This adaptability ensures competitiveness and responsiveness to market dynamics, geo-political conflicts, tariffs, and US Department of Defense and Asian and European defense requirements for country-of-origin and source of supply requirements. We have shifted our business development efforts to focus on markets where we have a greater competitive advantage and as a result revenues from defense applications have increased.
This adaptability ensures competitiveness and responsiveness to market dynamics, geo-political conflicts, tariffs, and US Department of War and Asian and European defense requirements for country-of-origin and source of supply requirements.
Our employees are in the U.S. and Europe and the laws regarding employee relationships are different by jurisdiction. None of our employees are covered by a collective bargaining agreement. We have policies to prevent discrimination based on gender, race, ethnicity, nationality, religion, sexual orientation, gender identity or gender expression.
None of our employees are covered by a collective bargaining agreement. We have policies to prevent discrimination based on gender, race, ethnicity, nationality, religion, sexual orientation, gender identity or gender expression. We take affirmative action to ensure that applicants are hired, and that employees are treated during employment without regard to their race, ethnicity, religion, sex, or national origin.
This approach reduces investment in plants and equipment, allowing us to stay agile and adapt to technological advancements. Our ASOS products are currently manufactured using a significant amount of direct labor. However, we have implemented initiatives to automate many of the processes required to manufacture the products.
Our ASOS products are currently manufactured using a significant amount of direct labor. However, we have implemented initiatives to automate many of the processes required to manufacture the products. For example, we removed human defect inspection of lenses and changed the process to use camera inspection.
Our development of OLED and MicroLED displays, including color and monochrome variants with capabilities such as NeuralDisplay™ Artificial Intelligent (“AI”) based eye-tracking, signifies our forward-looking approach to deliver new capabilities designed to enhance human performance where and when it matters most.
Our development of OLED and MicroLED displays, including color and monochrome variants with capabilities such as NeuralDisplay™ Artificial Intelligence (“AI”) based eye-tracking, signifies our forward-looking approach to deliver new capabilities designed to optimize human performance. Additionally, we offer display drivers, application-specific integrated circuits (“ASICS”), optical lenses, and backlights, manufactured by third parties, complementing its core offerings.
We may from time to time make further equity investments in these and other companies engaged in certain aspects of the display, electronics, optical and software industries as part of our business strategy. In addition, the wearable computing product market is relatively new and there may be other technologies we need to invest in to enhance our product offering.
The Company will also receive a royalty based on unit sales of products that utilize the technology licensed. We may from time to time make further equity investments in these and other companies engaged in certain aspects of the display, electronics, optical and software industries as part of our business strategy.
For example, we removed human defect inspection of lenses and changed the process to use camera inspection. Strategy and Market Expansion Our strategy is centered on participating in U.S. defense development programs, funded by government agencies and prime contractors, to develop leading-edge microdisplay technologies.
Strategy and Market Expansion Our strategy is centered on participating in U.S. defense development programs, funded by government agencies and prime contractors, to develop leading-edge microdisplay technologies. This approach supplements internal R&D budgets and enhances expertise, with revenues from these contracts contributing significantly to past years.
This approach supplements internal R&D budgets and enhances expertise, with revenues from these contracts contributing significantly to past years. We also utilize Small Business Innovation Research (“SBIR”) and Cooperative Research & Development Awards (“CRADA”) to work with Defense end-users directly to learn, develop, demonstrate, and commercialize new technologies.
We also utilize Small Business Innovation Research (“SBIR”) and Cooperative Research & Development Awards (“CRADA”) to work with Defense end-users directly to learn, develop, demonstrate, and commercialize new technologies. The knowledge gained is leveraged for industrial, medical, and consumer applications, aiming to diversify revenue streams.
This move is supported by our proprietary technologies, which enable the design and manufacture of high-performance, rugged systems. The additional capability in offering complete solutions positions us to better serve our customers by offering a seamless integration of components, ensuring optimal performance and ease of use.
The additional capability of offering complete solutions to our customers by offering a seamless integration of components, ensuring optimal performance and ease of use. This is a critical differentiator, as competitors do not typically provide integrated subassemblies or headsets.
The challenge is to integrate these advancements while reducing size, weight, power consumption and costs, as high-end displays currently contribute significantly to device prices. 2. Optics: o Optical systems require improvements to enhance visual clarity and user comfort. Lightweight and compact designs are crucial, especially for prolonged use in AR glasses and VR headsets.
Optical systems require improvements to enhance visual clarity and user comfort. Lightweight and compact designs are crucial, especially for prolonged use in AR glasses and VR headsets. Advances in lens materials and designs are underway, aiming to reduce weight and improve optical performance. 3.
In 2004, we finalized and adopted a Code of Business Conduct and Ethics regarding the standards of conduct of our directors, officers and employees. The code is reviewed and updated periodically by our Board of Directors and is available on our website at www.kopin.com.
The code is reviewed and updated periodically by our Board of Directors and is available on our website at www.kopin.com. Corporate Social Responsibility We strive to create and maintain a working environment that fosters honesty and hard work and rewards all of our employees’ hard work.
For OLED displays, we design the critical backplane and outsource manufacturing to foundries, adopting a fabless model to reduce capital costs and leverage existing infrastructure with best of class manufacturing partners globally. Optical lenses and backlights are either developed internally or licensed, with third-party manufacturing used to meet specifications.
For OLED displays, we design the critical backplane and outsource the deposition process to various foundries, with final assembly ans test at Kopin facilities. Optical lenses and backlights are either developed internally or licensed, with third-party manufacturing used to meet specifications. This approach reduces investment in plants and equipment, allowing us to stay agile and adapt to technological advancements.
We take affirmative action to ensure that applicants are hired, and that employees are treated during employment without regard to their race, ethnicity, religion, sex, or national origin. We also take affirmative action to employ and advance veterans in employment. We consider relations with our employees to be good.
We also take affirmative action to employ and advance veterans in employment. We consider relations with our employees to be good. 9 In 2004, we finalized and adopted a Code of Business Conduct and Ethics regarding the standards of conduct of our directors, officers and employees.
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Kopin Corporation, a Delaware corporation that was incorporated in 1984 and is headquartered in Westborough, Massachusetts, is renowned for its innovative microdisplay technologies and optical systems, catering to defense, enterprise, industrial, consumer, and medical sectors.
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The Company continues to research bi-directional sensing capabilities with potential partners, customers and investors.
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Strategic Initiatives and Recent Developments Historically, we have focused on selling individual display components, but we have shifted our focus to offering higher-value complete solutions. These solutions integrate displays, optics, and drive electronics into subassemblies or headsets, catering to the growing demand for integrated, application-specific products – our ASOS.
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During 2025, Kopin received a significant and strategic Industrial Analysis and Sustainment Act (IBAS) award from the Secretary of War to research and develop color MicroLED technology for soldier borne systems, heads up displays and other imaging applications within aircraft and automotive applications.
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This is a critical differentiator, as competitors like Samsung, LG, and Sony, while strong in display manufacturing, do not typically provide integrated subassemblies or headsets, requiring customers to handle the highly complex additional integration which requires complex processes, know-how and trade secrets, and specialized equipment and facilities to do correctly.
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The Company expects to receive additional government funding to further the technology and establish domestic full-rate productions within 2026 and beyond.
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Additionally, we offer display drivers, application-specific integrated circuits (“ASICS”), optical lenses, and backlights, manufactured by third parties, complementing its core offerings.
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Strategic Initiatives and Recent Developments Our strategy is to expand our offerings from selling individual display components to integrated, higher-value complete solutions, including headsets and subsystems This direction is supported by our proprietary technologies, enabling the design and manufacture of high-performance, rugged systems.
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Sales to significant non-affiliated customers for fiscal years 2024, 2023 and 2022, as a percentage of total revenues, were as follows: Sales as a Percent of Total Revenue Fiscal Year 2024 2023 2022 Customer Defense Customers in Total 82 % 56 % 52 % DRS Network & Imaging Systems, LLC 65 % 33 % 40 % Collins Aerospace 11 % 27 % 28 % Funded Research and Development Contracts 12 % 33 % 30 % Our fiscal year ends on the last Saturday in December.
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We have shifted our business development efforts to focus on markets where we have a greater competitive advantage and as a result revenues from defense applications remain a majority of our revenues.
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VR is utilized for training in hazardous settings, by companies such as RealWear among others. ● Medical Sector: AR headsets offer surgeons significant advantages over the historical arrangement of having multiple monitors in the operating suite.
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Sales to significant non-affiliated customers for fiscal years 2025 and 2024, as a percentage of total revenues, were as follows: (In thousands) 2025 2024 Defense $ 29,361 $ 41,249 Industrial 3,025 2,200 Consumer 9 24 Medical 594 103 Other product 78 — Net product revenues 33,067 43,576 R&D 4,590 5,997 License and royalties 410 762 ASC 606 revenues 38,067 50,335 Grant 858 — Collaboration 399 — Non ASC 606 revenues 1,257 — Total Revenues $ 39,324 $ 50,335 Our fiscal year ends on the last Saturday in December.
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Industrial and medical markets are growing, with customers like HMDmD, expanding our customer base. Research and development revenues, primarily from U.S. Government contracts, accounted for 12% of total revenues in 2024, down from 33% in 2023 and 30% in 2022, suggesting a shift from research and development to low-rate initial production (“LRIP”) sales.
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The challenge is to integrate these advancements while reducing size, weight, power consumption and costs, as high-end displays currently contribute significantly to device prices. 2. Optics: ○ Due to the recent FCC and DHS laws surrounding domestically manufactured Drone technology, the Company is developing customized and standard eye pieces and integrated optics for First Person Viewer (FPV) Drone Controllers.
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Recent Developments and Future Outlook Recent developments include a partnership with a major defense contractor in January 2025 for advanced microdisplays, enhancing its defense market position.
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These components are used in defense, industrial, medical, and consumer applications, offering complete solutions that include subassemblies and headsets. Other bi-directional architecture research was started midyear which may prove interesting for several current and new markets.
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The launch of a new OLED display in November 2024 and the MicroLED manufacturing patent in September 2024 further strengthen its AR/VR market potential, along with several noted updates on the emerging NeuralDisplay™ architecture development.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

67 edited+6 added−10 removed139 unchanged
Biggest changeThe increase in our cash and cash equivalents and marketable securities is primarily due to gross proceeds of $33.9 million received from the sale of 43.0 million shares of common stock and the pre-funded warrants to purchase up to 4,000,000 shares of common stock at a public offering price of $0.65 per share.
Biggest changeThe increase in our cash and cash equivalents and marketable securities is primarily due to gross proceeds of $33.9 million received from the sale of 43.0 million shares of common stock and the pre-funded warrants to purchase up to 4,000,000 shares of common stock at a public offering price of $0.65 per share, and net proceeds of approximately $38.1 million from a private placement fundraising activity for 19,545,950 shares of its common stock, par value $0.1 per share at a price of $2.10 per share, We plan to continue to invest in research and development even during periods when we are not profitable, which may result in our incurring losses from operations and negative cash flow.
We believe that for certain applications OLED microdisplays have performance advantages and we have received future display product needs from some customers that plan to switch from AMCLDs to OLED microdisplays in the next two to three years. We are in the process of designing and developing OLED microdisplays and establishing foundry relationships to manufacture them.
We believe that for certain applications OLED microdisplays have performance advantages and we have received future display product needs from some customers that plan to switch from AMCLDs to OLED microdisplays in the next two to three years. We are in the process of designing and developing OLED microdisplays and establishing foundry relationships to manufacture them.
We expect to make additional monetary investments in their commercialization, though our plan is to outsource their production. We have little experience in production outsourcing. If we are unsuccessful in designing and developing OLED microdisplays or if we are unable to find cost-effective third-party production partners, our sales and profitability may be negatively affected.
We expect to make additional monetary investments in their commercialization, though our plan is to outsource their production. We have little experience in production outsourcing. If we are unsuccessful in designing and developing OLED microdisplays or if we are unable to find cost-effective third-party production partners, our sales and profitability may be negatively affected.
Supply shortages have and could continue to impair the quality, reduce the availability or increase the cost of raw materials, which could harm our business. We rely on third-party independent contractors for certain integrated circuit chip sets, backlights, and other critical raw materials such as special glasses, wafers, and chemicals.
Supply shortages have and could continue to impair quality, reduce the availability or increase the cost of raw materials, which could harm our business. We rely on third-party independent contractors for certain integrated circuit chip sets, backlights, and other critical raw materials such as special glasses, wafers, and chemicals.
For example, we believe there is a growing demand for microLED display products and if microLEDs can be successfully commercialized they may reduce demand for our AMLCD and OLED displays. We are investing in the development of microLED display and the cost of such development we believe will be substantial.
For example, we believe there is a growing demand for microLED display products and if microLEDs can be successfully commercialized they may reduce demand for our AMLCD and OLED displays. We are investing in the development of microLED displays and the cost of such development we believe will be substantial.
In addition, due to the absence of a substantial non-cancellable backlog, we typically plan our production and inventory levels based on internal forecasts of customer demand, which are highly unpredictable and can fluctuate substantially. The uncertainty of product orders makes it difficult for us to forecast our sales and allocate our resources in a manner consistent with our actual sales.
In addition, due to the absence of a substantial non-cancellable backlog, we typically plan our production and inventory levels based on internal forecasts of customer demand, which are highly unpredictable and can fluctuate substantially. The uncertainty about product orders makes it difficult for us to forecast our sales and allocate our resources in a manner consistent with our actual sales.
The sale of additional equity or convertible securities would dilute all of our stockholders, and the terms of these securities may include liquidation or other preferences that adversely affect our existing stockholders. Management has identified material weaknesses in our internal controls over financial reporting, and we may be unable to develop, implement and maintain appropriate controls in future periods.
The sale of additional equity or convertible securities would dilute stockholders, and the terms of these securities may include liquidation or other preferences that adversely affect our existing stockholders. Management has identified material weaknesses in our internal controls over financial reporting, and we may be unable to develop, implement and maintain appropriate controls in future periods.
In recent years the U.S. has imposed, among other actions, new or higher tariffs, including those that have been or may be imposed by the new presidential administration in the U.S. on specified imported products originating from China in response to what it characterizes as unfair trade practices, and China has responded by proposing or implementing new or higher tariffs on specified products imported from the U.S.
In recent years the U.S. has imposed, among other actions, new or higher tariffs, including those that have been or may be imposed by the current presidential administration in the U.S. on specified imported products originating from China in response to what it characterizes as unfair trade practices, and China has responded by proposing or implementing new or higher tariffs on specified products imported from the U.S.
We may experience manufacturing problems that would result in delays in product introduction and delivery or yield fluctuations. A disruption to our information technology systems could significantly impact our operations, revenue and profitability. Our data processing systems and our Enterprise Resource Planning (“ERP”) software are cloud-based and hosted by third parties.
We may experience manufacturing problems that would result in delays in product introduction and delivery or yield fluctuations. A disruption to our information technology systems could significantly impact on our operations, revenue and profitability. Our data processing systems and our Enterprise Resource Planning (“ERP”) software are cloud-based and hosted by third parties.
Item 1A. Risk Factors We operate in a changing global environment that involves numerous known and unknown risks and uncertainties that could materially adversely affect our financial condition, results of operations, cash flows, and competitive position. Accordingly, our business and financial results are subject to a number of risks and uncertainties, including those set forth below.
Item 1A. Risk Factors We operate in a changing global environment that involves numerous known and unknown risks and uncertainties that could materially adversely affect our financial condition, results of operations, cash flows, and competitive position. Accordingly, our business and financial results are subject to risks and uncertainties, including those set forth below.
“Controls and Procedures” of this 2024 Form 10-K in “Management’s Report on Internal Control over Financial Reporting.” A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements would not be prevented or detected.
“Controls and Procedures” of this Annual Report on Form 10-K in “Management’s Report on Internal Control over Financial Reporting.” A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements would not be prevented or detected.
To continue to provide quality products in our rapidly changing business, we believe it is important to retain personnel with experience and expertise relevant to our business. Our success depends in large part upon several key management and technical employees. The loss of the services of one or more key employees, including Mr.
To continue to provide quality products in our rapidly changing business, we believe it is important to retain and recruit personnel with experience and expertise relevant to our business. Our success depends in large part upon several key management and technical employees. The loss of the services of one or more key employees, including Mr.
Government contracts; and ● Our ability to secure agreements from our major customers for the purchase of our products. 15 As a result of these and other factors, investors should not rely on our revenues and our operating results for any one quarter or year as an indication of our future revenues or operating results.
Government contracts; and ● Our ability to secure agreements from our major customers for the purchase of our products. As a result of these and other factors, investors should not rely on our revenues and our operating results for any one quarter or year as an indication of our future revenues or operating results.
Moreover, ethical concerns associated with artificial intelligence could lead to brand damage, competitive disadvantages, or legal repercussions. Any problems with our implementation or use of artificial intelligence or other technological advancements could also negatively impact our business or results of our operations. Disruptions of our production could adversely affect our operating results.
Moreover, ethical concerns associated with artificial intelligence could lead to brand damage, competitive disadvantages, or legal repercussions. Any problems with our implementation or use of artificial intelligence or other technological advancements could also negatively impact on our business or results of our operations. Disruptions of our production could adversely affect our operating results.
Our inability to attract and retain key personnel could adversely affect our ability to develop and manufacture our products. If we fail to keep pace with changing technologies, we may lose customers. Rapidly changing customer requirements and evolving technologies and industry standards characterize our industries.
Our inability to attract and retain key personnel could adversely affect our ability to develop and manufacture our products. If we fail to keep pace with changing technologies, we may lose customers. Rapidly changing customer requirements and evolving technologies and industry standards characterize our industry.
If a government review or investigation uncovers improper or illegal activities, we may be subject to civil or criminal penalties or administrative sanctions, including: ● Termination of contracts; ● Forfeiture of profits; ● Cost associated with triggering price reduction clauses; ● Suspension of payments; ● Fines; and ● Suspension or debarment from doing business with federal government agencies. 17 Additionally, the False Claims Act provides for substantial civil penalties where, for example, a contractor presents a false or fraudulent claim to the government for payment or approval.
If a government review or investigation uncovers improper or illegal activities, we may be subject to civil or criminal penalties or administrative sanctions, including: ● Termination of contracts; ● Forfeiture of profits; ● Cost associated with triggering price reduction clauses; ● Suspension of payments; ● Fines; and ● Suspension or debarment from doing business with federal government agencies. 18 Additionally, the False Claims Act provides for substantial civil penalties where, for example, a contractor presents a false or fraudulent claim to the government for payment or approval.
If we are unsuccessful in executing our transition plan or if the transition is significantly delayed, our ability to manufacture and distribute our products could continue to be adversely affected, which in turn would adversely affect our results of operations or financial condition. 14 Our business, results of operations and financial condition could be adversely affected by events beyond our control, such as natural disasters, public health crises, political crises, negative global climate patterns, or other catastrophic events.
If we are unsuccessful in executing our transition plan or if the transition is significantly delayed, our ability to manufacture and distribute our products could continue to be adversely affected, which in turn would adversely affect our results of operations or financial condition. 16 Our business, results of operations and financial condition could be adversely affected by events beyond our control, such as natural disasters, public health crises, political crises, negative global climate patterns, or other catastrophic events.
Government can opt to change suppliers, in which case demand for our products could be negatively affected. In addition, the government could postpone or cancel these programs. We believe the DoD is evaluating alternative display technologies for the F-35 Strike Fighter program and other defense programs, and we will need to develop and qualify any replacement display technologies.
Government can opt to change suppliers, in which case demand for our products could be negatively affected. In addition, the government could postpone or cancel these programs. We believe the DoW is evaluating alternative display technologies for the F-35 Strike Fighter program and other defense programs, and we will need to develop and qualify any replacement display technologies.
We also cannot be certain that past use or disposal of environmentally sensitive materials in conformity with the existing environmental laws and regulations will protect us from required remediation or other liabilities under current or future environmental laws or regulations. 21 We may be unable to modify our products to meet regulatory or customer requirements.
We also cannot be certain that past use or disposal of environmentally sensitive materials in conformity with the existing environmental laws and regulations will protect us from required remediation or other liabilities under current or future environmental laws or regulations. 22 We may be unable to modify our products to meet regulatory or customer requirements.
We are also subject to federal International Traffic in Arms Regulations (ITAR) laws that regulate the export of technical data and export of products to other nations that may use these products for defense purposes. Failure to comply with present or future regulations could result in fines, suspension of production, or a cessation of operations.
We are also subject to federal International Traffic in Arms Regulations (“ITAR”) laws that regulate the export of technical data and export of products to other nations that may use these products for defense purposes. Failure to comply with present or future regulations could result in fines, suspension of production, or a cessation of operations.
Our reliance on these foundries involves certain risks, including but not limited to: ● Lack of control over production capacity and delivery schedules; ● Limited control over quality assurance, manufacturing yields and production costs; ● The risks associated with international commerce, including unexpected changes in legal and regulatory requirements supply chain interruptions or increased costs, changes in tariffs and trade policies, including those imposed or that may be imposed by the new presidential administration in the U.S., and political and economic instability, international hostilities and resulting sanctions, acts of terrorism and governmental restrictions, inflation, trade relationships and military and political alliances; and ● Natural disasters such as earthquakes, tsunamis, mudslides, drought, hurricanes and tornadoes.
Our reliance on these foundries involves certain risks, including but not limited to: ● Lack of control over production capacity and delivery schedules; ● Limited control over quality assurance, manufacturing yields and production costs; ● The risks associated with international commerce, including unexpected changes in legal and regulatory requirements supply chain interruptions or increased costs, changes and uncertainties with respect to tariffs and trade policies, including those imposed or that may be imposed by the current presidential administration in the U.S., and political and economic instability, international hostilities and resulting sanctions, acts of terrorism and governmental restrictions, inflation, trade relationships and military and political alliances; and ● Natural disasters such as earthquakes, tsunamis, mudslides, drought, hurricanes and tornadoes.
There are several companies that develop or may develop products that compete in our targeted markets. The individual components that we offer for sale (displays, optical lenses, backlights and ASICs) are also offered by companies whose sole business focuses on that individual component. For example, there are companies whose sole business is to sell optical lenses.
There are several companies that develop or may develop products that compete in our target markets. The individual components that we offer for sale (displays, optical lenses, backlights and ASICs) are also offered by companies whose sole business focuses on that individual component. For example, there are companies whose sole business is to sell optical lenses.
In 2023 and 2024, we experienced quality issues with the products we supplied for the FWS-I program. These quality issues resulted in suspension of shipments to our customer at various times during 2023 and 2024 as we made modifications to our production processes. We are continuing to make modifications to our production processes as we resolve certain issues.
In 2024, we experienced quality issues with the products we supplied for the FWS-I program. These quality issues resulted in suspension of shipments to our customer at various times during 2024 as we made modifications to our production processes. We are continuing to make modifications to our production processes as we resolve certain issues.
Government priorities, policies and requirements could have a material adverse effect on our results of operations, financial condition or liquidity. 13 Most of our defense sales are on a fixed-price basis, which could subject us to losses if there are cost overruns .
Government priorities, policies and requirements could have a material adverse effect on our results of operations, financial condition or liquidity. 14 Most of our defense sales are on a fixed-price basis, which could subject us to losses if there are cost overruns .
We may in the future receive show-cause or cure notices under contracts that, if not addressed to the federal government’s satisfaction, could give the government the right to terminate those contracts for default or to cease procuring our services under those contracts. 16 In addition, U.S.
We may in the future receive show-cause or cure notices under contracts that, if not addressed to the federal government’s satisfaction, could give the government the right to terminate those contracts for default or to cease procuring our services under those contracts. 17 In addition, U.S.
Our trade secrets may not be secure from discovery or independent development by competitors, in which case we may not be able to rely on these trade secrets to prevent our competitors from using them. 20 Our business could suffer if we fail to recruit and retain key personnel.
Our trade secrets may not be secure from discovery or independent development by competitors, in which case we may not be able to rely on these trade secrets to prevent our competitors from using them. 21 Our business could suffer if we fail to recruit and retain key personnel.
If we fail to comply with any of these regulations, we could be subject to a range of regulatory actions, fines or other sanctions or litigation. If we must disclose any material weakness in our internal control over financial reporting, our stock price could decline. 22
If we fail to comply with any of these regulations, we could be subject to a range of regulatory actions, fines or other sanctions or litigation. If we must disclose any material weakness in our internal control over financial reporting, our stock price could decline. 23
Moreover, the license fees we pay may be increased, which would negatively affect our ability to achieve profitability and positive cash flow. 19 We may incur substantial costs in defending our intellectual property and may not be successful in protecting our intellectual property and proprietary rights.
Moreover, the license fees we pay may be increased, which would negatively affect our ability to achieve profitability and positive cash flow. 20 We may incur substantial costs in defending our intellectual property and may not be successful in protecting our intellectual property and proprietary rights.
Our business may be impacted by disruptions to our own or third-party information technology (IT) infrastructure, which could result from, among other causes, cyberattacks on or failures of such infrastructure or compromises to its physical security.
Our business may be impacted by disruptions to our own or third-party information technology (“IT”) infrastructure, which could result from, among other causes, cyberattacks on or failures of such infrastructure or compromises to its physical security.
We cannot provide assurance against supplier price increases that negatively impact the cost of producing products, which may adversely affect sales or profitability. Finding and/or qualifying a more cost-effective replacement supplier may take significant time. 18 The markets in which we operate are highly competitive and rapidly changing and we may be unable to compete successfully.
We cannot provide assurance against supplier price increases that negatively impact on the cost of producing products, which may adversely affect sales or profitability. Finding and/or qualifying a more cost-effective replacement supplier may take significant time. 19 The markets in which we operate are highly competitive and rapidly changing and we may be unable to compete successfully.
If these foundries were to become unable to provide the required capacity, services or quality on a timely basis due to a military or other form of conflict, geopolitical tensions, including in Ukraine, the Middle East, China, Taiwan and other regions, financial market volatility and disruption, inflationary concerns, changes in tax laws and regulations, interest and currency exchange rates, uncertain economic conditions in the United States and abroad, and additional tariffs, including those imposed or that may be imposed by the new presidential administration in the U.S., or other reasons relating thereto, we may not be able to manufacture and ship our display products, or we may be forced to manufacture them in limited quantities until replacement foundry services can be obtained.
If these foundries were to become unable to provide the required capacity, services or quality on a timely basis due to a military or other form of conflict, geopolitical tensions, including in Ukraine, the Middle East, China, Taiwan and other regions, financial market volatility and disruption, inflationary concerns, changes in tax laws and regulations, interest and currency exchange rates, uncertain economic conditions in the United States and abroad, and uncertainties with respect to tariffs, including those imposed or that may be imposed by the current presidential administration in the U.S., or other reasons relating thereto, we may not be able to manufacture and ship our display products, or we may be forced to manufacture them in limited quantities until replacement foundry services can be obtained.
We have experienced intermittent shortages of raw materials, which has affected our ability to manufacture and ship units. These shortages have also resulted in an increase in the cost of raw materials and semiconductor components. Our products sold for defense applications go through an expensive and long qualification period before the government will accept the products.
We have experienced intermittent shortages of raw materials, which has affected our ability to manufacture and ship units. These shortages have also resulted in an increase in the cost of raw materials and semiconductor components. Our products sold for defense applications go through an expensive and long qualification period before the government accepts the products.
Government budgetary issues, including reductions or shifts in the capital resources or government funding, and related legislation. As a result, DoD funding levels have fluctuated and have been difficult to predict.
Government budgetary issues, including reductions or shifts in the capital resources or government funding, and related legislation. As a result, DoW funding levels have fluctuated and have been difficult to predict.
In addition, future actions or escalations by either the U.S. or China that affect trade relations may also affect our business or that of our suppliers or customers, and we cannot provide any assurances as to whether such actions will occur or the form that they may take.
Accordingly, future actions or escalations by either the U.S. or China that affect trade relations may also affect our business or that of our suppliers or customers, and we cannot provide any assurances as to whether such actions will occur or the form that they may take.
We have experienced a history of losses, have a significant accumulated deficit, have had negative cash flow from operating activities in fiscal years 2024, 2023, and 2022, and expect to have negative cash flow from operating activities in fiscal year 2025 . Since inception, we have incurred significant net operating losses.
We have experienced a history of losses, have a significant accumulated deficit, have had negative cash flow from operating activities in fiscal years 2025 and 2024, and expect to have negative cash flow from operating activities in fiscal year 2026 . Since inception, we have incurred significant net operating losses.
Some of our contracts have specific provisions relating to cost, scheduling, and performance. If we fail to meet the terms specified in those contracts, then our cost to perform the work could increase, which would adversely affect our financial position and results of operations. Some of the contracts we bid on have Indefinite Delivery, Indefinite Quantity (“IDIQ”) provisions.
If we fail to meet the terms specified in those contracts, then our cost to perform the work could increase, which would adversely affect our financial position and results of operations. Some of the contracts we bid on have Indefinite Delivery, Indefinite Quantity (“IDIQ”) provisions.
As a result, defense spending levels are difficult to predict beyond the near term due to numerous factors, including the external threat environment, future government priorities and changes to funding of government agencies, and the state of government finances. Significant changes in defense spending or changes in U.S.
Government defaulting on its debts. As a result, defense spending levels are difficult to predict beyond the near term due to numerous factors, including the external threat environment, future government priorities and changes to funding of government agencies, and the state of government finances. Significant changes in defense spending or changes in U.S.
Companies may decide to stop supporting the software we license, or new versions of the software may not be compatible with our software, which would require us to rewrite our software, which we may not be able to do.
Companies may decide to stop supporting the software we are licensing, or new versions of the software may not be compatible with our software, which would require us to rewrite our software, which we may not be able to do.
As a result, our Chief Executive Officer and Chief Financial Officer concluded that our internal controls over financial reporting were not effective as of December 28, 2024. The specific material weaknesses are described in Part II - Item 9A.
As a result, our Chief Executive Officer and Chief Financial Officer concluded that our internal controls over financial reporting were not effective as of December 27, 2025. The specific material weaknesses are described in Part II - Item 9A.
For example, in the third quarter of 2024, we reviewed the financial condition and other factors of our investment in a customer and as a result, we recorded an impairment charge of $0.7 million to reduce the carrying value of our investment. These investments may not contribute to our earnings or cash flows.
For example, in the third quarter of 2025, we reviewed the financial condition and other factors of our investment in a customer and as a result, we recorded an impairment charge of $0.4 million to reduce the carrying value of our investment. These investments may not contribute to our earnings or cash flow.
However, the establishment of these interim controls does not provide the same degree of assurance as a fully remediated control environment. For more information relating to our internal control over financial reporting and disclosure controls and procedures, and the remediation plan that we have undertaken, see Part II - Item 9A. “Controls and Procedures” of this 2024 Form 10-K.
However, the establishment of these interim controls does not provide the same degree of assurance as a fully remediated control environment. For more information relating to our internal control over financial reporting and disclosure controls and procedures, and the remediation plan that we have undertaken, see Part II - Item 9A.
Our ability to produce products which meet these specifications is dependent on a number of factors including but not limited to our manufacturing processes and our vendors providing raw materials that meet the specifications we have agreed to with them.
Our ability to produce products which meet these specifications is dependent on numerous including, but not limited to, our manufacturing processes and our vendors providing raw materials that meet the specifications we have agreed to with them.
We may not achieve some or all of the anticipated benefits of our equity investments. On December 28, 2024, we had equity investments in companies totalling $3.6 million, where we have limited, if any, control over their governance, financial reporting and operations.
We may not achieve some or all of the anticipated benefits of our equity investments. On December 27, 2025, we had equity investments in companies totaling $12.4 million, where we have limited, if any, control over their governance, financial reporting and operations.
As of December 28, 2024, we had an accumulated deficit of $402.0 million. At December 28, 2024 and December 30, 2023, we had $36.6 million and $17.9 million of cash and cash equivalents, including restricted cash, and marketable securities, respectively. For the years 2024 and 2023, net cash used in operating activities was $14.2 million and $15.3 million, respectively.
As of December 27, 2025, we had an accumulated deficit of $399.5 million. At December 27, 2025 and December 28, 2024, we had $61.6 million and $36.6 million of cash and cash equivalents, including restricted cash, and marketable securities, respectively. For the years 2025 and 2024, net cash used in operating activities was $15.5 million and $14.2 million, respectively.
Our revenues and cash flows could be negatively affected if sales of our display products for defense applications significantly decline or the current defense development programs are either cancelled or ultimately do not result in future product sales.
If we are unable to manufacture our products cost effectively, our revenue and ability to obtain profitability will be adversely affected. Our revenues and cash flows could be negatively affected if sales of our display products for defense applications significantly decline or the current defense development programs are either cancelled or ultimately do not result in future product sales.
Government has been unable to complete its budget process before the end of its fiscal year, resulting in both a government shutdown and continuing resolutions to extend sufficient funds only for U.S. Government agencies to continue operating.
Government has been unable to complete its budget process before the end of its fiscal year, resulting in both a government shutdown and continuing resolutions to extend sufficient funds only for U.S. Government agencies to continue operating. Additionally, if the national debt reaches the statutory debt ceiling in future years, it could result in the U.S.
Many of our customers’ contracts cover multiple years and, as such, are not fully funded at the contract award. If Congress or a U.S.
Many of our customers’ contracts cover multiple years and, as such, are not fully funded at the contract award. If appropriations from Congress or a U.S. Government agency change, our customers’ contracts may be terminated for convenience.
We may be unable to manufacture our products cost effectively to meet contractual specifications or customer requirements. Our products are required to meet specifications agreed to in purchase orders and related agreements with our customers.
“Controls and Procedures” of this Annual Report on Form 10-K. 13 We may be unable to manufacture our products cost effectively to meet contractual specifications or customer requirements. Our products are required to meet specifications agreed to in purchase orders and related agreements with our customers.
Significantly larger organizations with much greater resources than us have been the victim of cybercrimes. We routinely receive emails probing our Internet security, and our Internet security systems have detected outside organizations attempting to install Trojan virus software packages in our systems. We rely on our electronic information systems to perform routine transactions to run our business.
We routinely receive emails probing our Internet security, and our Internet security systems have detected outside organizations attempting to install Trojan virus software packages in our systems. We rely on our electronic information systems to perform routine transactions to run our business.
Our investments in the development and sale of OLED microdisplays may not be successful, which may materially adversely affect our sales, profitability and cash flow. Historically, we have sold products that incorporate our proprietary AMLCDs.
Due to the evolving nature of such risks, the impact of any potential incident cannot be predicted. 15 Our investments in the development and sale of OLED microdisplays may not be successful, which may materially adversely affect our sales, profitability and cash flow. Historically, we have sold products that incorporate our proprietary AMLCDs.
Our Chinese investments are subject to laws and regulations applicable to foreign investment in China as well as laws and regulations applicable to foreign-invested enterprises. These laws and regulations frequently change, including as a result of the new presidential administration in the U.S., and their interpretation and enforcement involve uncertainties that could limit the legal protections available to us.
These laws and regulations frequently change, including as a result of the current presidential administration in the U.S., and their interpretation and enforcement involve uncertainties that could limit the legal protections available to us.
We may be unable to successfully integrate new strategic acquisitions and investments, which could materially adversely affect our business, results of operations and financial condition. In the past, we have made, and in the future, we may make acquisitions of, and investments in, businesses, products and technologies that could complement or expand our business.
In the past, we have made, and in the future, we may make acquisitions of, and investments in, businesses, products and technologies that could complement or expand our business. We may not be able to successfully integrate future acquired businesses, assets or technologies into our existing business and products.
Any of these could have a material adverse effect on our competitive position, results of operations, financial condition or liquidity. Due to the evolving nature of such risks, the impact of any potential incident cannot be predicted.
Any of these could have a material adverse effect on our competitive position, results of operations, financial condition or liquidity.
The Sarbanes-Oxley Act of 2002 and SEC rules require that management annually report on the effectiveness of our internal control over financial reporting and our disclosure controls and procedures. As more fully described within Item 9A, “Controls and Procedures,” of this Form 10-K, in the fourth quarter of 2024 management identified material weaknesses in internal control over financial reporting.
As more fully described within Item 9A, “Controls and Procedures,” of this Annual Report on Form 10-K, management determined that the material weaknesses in internal control over financial reporting previously identified in our 2024 Annual Report on Form 10-K had not been fully remediated and identified an additional material weakness in internal control over financial reporting.
Murray, our President and Chief Executive Officer, could seriously impede our success. We do not maintain any “key-man” insurance policies on Mr. Murray or any other employees.
Murray, our President and Chief Executive Officer, could seriously impede our success. We do not maintain any “key-man” insurance policies on Mr. Murray or any other employees. Due to the competitive nature of the labor markets in which we operate, we may be unsuccessful in attracting and retaining these personnel.
There can be no assurance, however, as to when the remediation plan will be fully developed, when it will be fully implemented and/or the cost of its implementation. Until our remediation plan is fully implemented, we will continue to devote significant time and attention to these efforts.
We are in the process of developing and implementing our remediation plan for the identified material weaknesses, and we expect that this work will continue in 2026. There can be no assurance, however, as to when the remediation plan will be fully developed, when it will be fully implemented and/or the cost of its implementation.
From time to time our display products are subject to new domestic and international requirements, such as the European Union’s Restriction on Hazardous Substances Directive.
From time to time our products display are subject to new domestic and international requirements, such as the European Union’s Restriction on Hazardous Substances Directive. If we are unable to comply with these regulations, we may not be permitted to ship our products, which would adversely affect our revenue and ability to maintain profitability.
Additionally, we have several investments where we may have limited, if any, control over their governance, financial reporting, and operations. As a result, we face certain operating, financial and other risks relating to these investments, including risks related to the financial strength of the investments. As a result, these investments may not contribute to our earnings or cash flows.
As a result, we face certain operating, financial and other risks relating to these investments, including risks related to the financial strength of the investments. As a result, these investments may not contribute to our earnings or cash flows. In addition, these investments may be required to raise additional capital, which may result in our ownership percentage being decreased.
As discussed above, we are seeing a global shortage of semiconductors and other raw materials which is resulting in a significant increase in some raw material prices. In addition, the U.S. recently experienced inflation levels not seen in many years which drove higher labor costs and there is an expectation that tariffs may result in additional inflation in the future.
In addition, the U.S. recently experienced inflation levels not seen in many years which drove higher labor costs and there is an expectation that tariffs may result in additional inflation in the future. Some of our contracts have specific provisions relating to cost, scheduling, and performance.
Product recalls and product liability and warranty claims can result in significant damages and costs, including fines, as well as other harm to our business. If we are unable to manufacture our products cost effectively, our revenue and ability to obtain profitability will be adversely affected.
If the products we deliver are found to have undetected defects or latent defects upon shipment, we may incur the cost to recall the products. Product recalls and product liability and warranty claims can result in significant damages and costs, including fines, as well as other harm to our business.
When we commence production of new products, we normally go through a period of low production efficiency as we modify our production processes for higher volume output and train more production employees on how to make the product.
In addition, while there may be agreement with our customers on the specifications there may be ambiguity with the method to measure compliance with meeting the specifications. When we commence production of new products, we normally go through a period of low production efficiency as we modify our production processes for higher volume output, resulting in higher costs.
Low production efficiency means that the cost to make the product is more than what we anticipated when we accepted the purchase order from the customer. In addition, after we commence selling our products customers may request changes to the products which may also result in the low production efficiency starting again.
In addition, after we commence selling our products customers may request changes to the products which may also result in low production efficiency. We currently have several new products and new product configurations going to production.
If the initial estimates that we use to calculate the sales price and the cost of performing the work prove to be incorrect, we could incur losses. We have had situations where we have underestimated the cost of a program and incurred losses in fulfilling the contract.
If the initial estimates that we use to calculate the sales price and the cost of performing the work prove to be incorrect, we could incur losses. As discussed above, we are seeing a global shortage of semiconductors and other raw materials which is resulting in a significant increase in some raw material prices.
In addition, these investments may be required to raise additional capital, which may result in our ownership percentage being decreased. Changes in China’s laws, legal protections or government policies on foreign investment in China may harm our business.
Changes in China’s laws, legal protections or government policies on foreign investment in China may harm our business. Our Chinese investments are subject to laws and regulations applicable to foreign investment in China as well as laws and regulations applicable to foreign-invested enterprises.
If we identify an acquisition candidate, we may not be able to successfully integrate the acquired businesses, products or technologies into our existing business and products. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities, amortization expenses and write-downs of acquired assets.
Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities, amortization expenses and write-downs of acquired assets. Additionally, we have several investments where we may have limited, if any, control over their governance, financial reporting, and operations.
Our customers’ terms and conditions require us to follow “all laws.” If we are unable to comply with these regulations, we may not be permitted to ship our products, which would adversely affect our revenue and ability to maintain profitability. In addition, if we are found to be in violation of laws, we may be subject to fines and penalties.
In addition, if we are found to be in violation of laws, we may be subject to fines and penalties. We may be unable to successfully integrate new strategic acquisitions and investments, which could materially adversely affect our business, results of operations and financial condition.
DoD source of supply requirements and duplicity to reduce the risk of Chinese supply and potential tariffs.
DoW source of supply requirements and duplicity to reduce the risk of Chinese supply and potential tariffs. On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act.
Removed
We have accrued $24.8 million for a litigation issue and as a result we have concluded that there is substantial doubt about our ability to continue as a going concern within one year following the issuance of this annual report.
Added
The Sarbanes-Oxley Act of 2002 and SEC rules require that management annually report on the effectiveness of our internal control over financial reporting and our disclosure controls and procedures.
Removed
We plan to continue to invest in research and development even during periods when we are not profitable, which may result in our incurring losses from operations and negative cash flow.
Added
Until our remediation plan is fully implemented, we will continue to devote significant time and attention to these efforts.
Removed
The material weaknesses did not result in any identified misstatements to the December 28, 2024, audited financial statements, nor with respect to the financial statements for any previously reported period. We are in the process of developing and implementing our remediation plan for the identified material weaknesses, and we expect that this work will continue in 2025.
Added
In addition, tariffs and international trade arrangements may continue to change, potentially without warning and to an extent that is difficult to predict.
Removed
In addition, while there may be agreement with our customers on the specifications there may be ambiguity with the method to measure compliance with meeting the specifications.
Added
It remains uncertain how this decision will affect the existing tariffs or whether additional tariffs will be imposed under other laws.
Removed
We currently have several new products and new product configurations going to production. If the products we deliver are found to have undetected defects or latent defects when we ship them, we may incur the cost to recall the products.
Added
Significant uncertainty exists regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on our business .
Removed
Most recently, the federal government was shut down due to a lack of funding for over one month between late 2018 and early 2019. Additionally, the national debt has recently threatened to reach the statutory debt ceiling in 2024, and such an event in future years could result in the U.S. Government defaulting on its debts.
Added
We are continuing to monitor and evaluate these developments and assess their potential negative effects on our business, financial condition, and results of operations.
Removed
Government agency chooses to spend money on other programs, including as a result of changes to governmental policies and programs imposed or that may be imposed by the new presidential administration in the U.S., our customers’ contracts may be terminated for convenience.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor more information on risks related to cybersecurity, see Item IA. “Risk Factors” of this Form 10-K.
Biggest changeFor more information on risks related to cybersecurity, see Item IA. “Risk Factors” of this Annual Report on Form 10-K.
We, or third parties we contract with, monitor and conduct regular testing of these controls and systems, including vulnerability management through active discovery and testing to regularly assess patching and configuration status. In addition, we require our employees to complete annual cybersecurity training, and we regularly conduct simulated phishing and cyber-related communications. Incident Response.
We, or third parties, contract with, monitor and conduct regular testing of these controls and systems, including vulnerability management through active discovery and testing to regularly assess patching and configuration status. In addition, we require our employees to complete annual cybersecurity training, and we regularly conduct simulated phishing and cyber-related communications. Incident Response.
The Chief Financial Officer regularly reports to the Board of Directors on the status of the Company’s cybersecurity program and provides the Board with the annual assessment by a third party on the Company’s cybersecurity program. Cybersecurity risks are also included with the Company’s annual business risk assessment which is provided to the Board of Directors.
The Chief Financial Officer regularly reports to the Board of Directors on the status of the Company’s cybersecurity program and provides the Board with the annual assessment by a third party on the Company’s cybersecurity program. Cybersecurity risks are also included with the Company’s annual business risk assessment which is provided by the Board of Directors.
Cybersecurity threats include attacks on, or other attempts to infiltrate, our information technology (IT) infrastructure and the IT infrastructure of our customers, suppliers, subcontractors and other third parties, attempting to gain unauthorized access to our confidential or other proprietary information, classified information, or information relating to our employees, customers, and other third parties, or to disrupt our systems or the systems of our customers, suppliers, subcontractors, and other third parties.
Cybersecurity threats include attacks on, or other attempts to infiltrate, our information technology (“IT”) infrastructure and the IT infrastructure of our customers, suppliers, subcontractors and other third parties, attempting to gain unauthorized access to our confidential or other proprietary information, classified information, or information relating to our employees, customers, and other third parties, or to disrupt our systems or the systems of our customers, suppliers, subcontractors, and other third parties.
Our management of cybersecurity risks to the Company is integrated into our Company-wide enterprise risk management program. Our enterprise cybersecurity program aligns with the National Institute of Standards and Technology (NIST) standards, among others. The program includes processes and controls for the deployment of new IT systems by the Company and controls over new and existing system operations.
Our management of cybersecurity risks to the Company is integrated into our Company-wide enterprise risk management program. Our enterprise cybersecurity program aligns with the National Institute of Standards and Technology (“NIST”) standards, among others. The program includes processes and controls for the deployment of new IT systems by the Company and controls over new and existing system operations.
Moreover, our products sold for defense applications are integrated with our customers’ products and these customers may provide us with Controlled Unclassified Information (CUI) that requires, safeguarding and dissemination controls in accordance with laws, regulations, or Government-wide policies.
Moreover, our products sold for defense applications are integrated with our customers’ products and these customers may provide us with Controlled Unclassified Information (“CUI”) that requires, safeguarding and dissemination controls in accordance with laws, regulations, or Government-wide policies.
This approach is designed to oversee and manage risks related to data breaches or other security incidents originating from third parties. 23 Program Assessment We continuously evaluate and seek to improve and mature our cybersecurity processes.
This approach is designed to oversee and manage risks related to data breaches or other security incidents originating from third parties. 24 Program Assessment We continuously evaluate and seek to improve and mature our cybersecurity processes.
Item 1C. Cybersecurity As a company selling products for defense applications, we may be the target of cyber-attacks from a variety of threat actors.
Item 1C. Cybersecurity As a company that sells products for defense applications, we may be the target of cyber-attacks from a variety of threat actors.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeKEL, our subsidiary in Scotland, leases 20,000 square feet in Dalgety Bay, 5,000 square feet of which is contiguous environmentally controlled production clean rooms operated between Class 10 and Class 10,000 levels. KEL also leases an office in Berlin, Germany. At this time, we believe these properties are suitable for business needs for the foreseeable future.
Biggest changeKEL, leases 20,000 square feet in Dalgety Bay, 5,000 square feet of which is contiguous environmentally controlled production clean rooms operated between Class 10 and Class 10,000 levels. KEL also leases an office in Berlin, Germany. We believe these properties are suitable for business needs for the foreseeable future.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

3 edited+9 added−7 removed5 unchanged
Biggest changeOn 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.
Biggest changeBlueRadios seeks monetary, declaratory, and injunctive relief, including for alleged non-payment of engineering retainer fees. 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.
That same day, BlueRadios filed motions seeking a permanent injunction prohibiting Kopin from selling any products that incorporate BlueRadios’ trade secrets, over $10 million in pre-judgment interest, and over $10 million in attorneys’ fees and costs. Briefing on those issues concluded on June 26, 2024.
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.
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)).
District Court for the District of Colorado, alleging that the Company breached a contract between it and BlueRadios concerning the design, development and commercialization 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)).
Removed
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.
Added
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.
Removed
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.
Added
In the second quarter of 2024, the Company had estimated and accrued $24.8 million in probable and reasonably estimable damages for this matter.
Removed
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.
Added
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.
Removed
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.
Added
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 $3.3 million to $1.9 million as of September 27, 2025.
Removed
The Court also ordered discovery reopened for certain limited purposes. A trial date was set by the Court for January 22 to February 5, 2024 but then re-scheduled for March 20 to April 16, 2024.
Added
The reduction in accrued legal fees is included within selling, general and administration in the Company’s condensed consolidated financial statements for the three and nine months ended September 27, 2025.
Removed
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.
Added
On October 2, 2025, the Company posted a supersedeas bond for $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.
Removed
The Company is currently considering an appeal of any final judgment.
Added
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 plus $1.15 million in fees for a total of $24.2 million the Company deposited with the bank. This $24.2 million is classified as Restricted Cash.
Added
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.
Added
On October 7, 2025, the Company filed an appeal of the $19.7 million judgement against the Company in connection with the BlueRadios litigation. As of December 27, 2025, the Company has accrued $19.7 million for the judgment within Accrued litigation liability and has accrued approximately $0.3 million in related interest within Other accrued liabilities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePlan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (b) Equity compensation plans approved by security holders 4,833,611 $ 1.19 4,913,621 (1) Equity compensation plans not approved by security holders — $ — — (1) Amount includes shares available under the 2020 Equity Incentive Plan. 25 Company Stock Performance The following graph shows a five-year comparison of cumulative total shareholder return for the Company, the Nasdaq US Benchmark TR Index and the S&P 500 Information Technology index.
Biggest changePlan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (b) ) Equity compensation plans approved by security holders 4,939,844 $ 1.41 7,530,092 (1) Equity compensation plans not approved by security holders 400,000 $ 2.14 — (1) Consists of shares available under the 2020 Equity Incentive Plan. 26 Recent Sale of Unregistered Securities The Company has not issued unregistered securities to any person within the last three years, except as described below.
We anticipate that earnings, if any, will be retained for the development of our businesses. Equity Compensation Plan Information The following table sets forth information as of December 28, 2024 about shares of the Company’s common stock issuable upon the exercise of outstanding options, warrants and rights and available for issuance under our existing equity compensation plans.
We anticipate that earnings, if any, will be retained for the development of our businesses. Equity Compensation Plan Information The following table sets forth information as of December 27, 2025, about shares of the Company’s common stock issuable upon the exercise of outstanding options, warrants and rights and available for issuance under our existing equity compensation plans.
The graph assumes $100 was invested in each of the Company’s common stock, the Nasdaq US Benchmark TR Index and the S&P 500 Information Technology index on December 31, 2017. Data points on the graph are annual. Note that historical price performance is not necessarily indicative of future performance. 26
The graph assumes $100 was invested in each of the Company’s common stock, the Nasdaq US Benchmark TR Index and the S&P 500 Information Technology index on December 31, 2020. Data points on the graph are annual. Note that historical price performance is not necessarily indicative of future performance. 27
As of March 7, 2025, there were approximately 292 shareholders of record of our common stock, which does not reflect those shares held beneficially or those shares held in “street” name. We have not paid cash dividends in the past, nor do we expect to pay cash dividends for the foreseeable future.
As of March 9, 2026, there were approximately 273 shareholders of record of our common stock, which does not reflect those shares held beneficially or those shares held in “street” name. We have not paid cash dividends in the past, nor do we expect to pay cash dividends to common shareholders for the foreseeable future.
Added
None of these transactions involved any underwriters, underwriting discounts or commissions, except as specified below, or any public offering, and, unless otherwise indicated below, the Company believes that each transaction was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof, Rule 701 of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder.
Added
All recipients had adequate access, through their relationships with the Company, to information about the Company.
Added
On October 16, 2025, Theon purchased 1,000 shares of Series A Convertible Preferred Stock at a price of $7,000 pursuant to that certain Series A Convertible Preferred Stock Purchase Agreement, dated August 8, 2025, by and between the Company and Theon, as amended by the First Amendment to Series A Convertible Preferred Stock Purchase Agreement, dated September 30, 2025.
Added
Each share of the Preferred Stock is convertible into shares of the Company’s Common Stock, at an initial conversion price of $3.00 per share subject to a 9.99% beneficial ownership blocker.
Added
If the Common Stock of the Company trades at the Mandatory Conversion Price for at least 10 trading days within a 30 consecutive trading day period, the Company can force conversion at 80% of the Mandatory Conversion Price. The Preferred Stock earns 4% annual dividends (2% payable in cash and 2% payable in Preferred Stock).
Added
The Preferred Stock shall vote on an “if converted” basis with the Common Stock of the Company. On September 29, 2025, the Company announced that it has entered into the Purchase Agreement with certain investors pursuant to which the Company agreed to sell and issue pursuant to the PIPE, 19,545,950 Shares.
Added
The net proceeds to the Company from the offering are estimated to be approximately $38.1 million, after deducting placement agent fees and commissions and estimated offering expenses payable by the Company. The transaction closed on September 30, 2025.
Added
The Company also entered into a Placement Agency Agreement (the “Placement Agency Agreement”) with Stifel, Nicolaus & Company, Incorporated, LLC (the “Placement Agent”), dated June 10, 2025 and amended on September 23, 2025, pursuant to which the Placement Agent acted as the exclusive placement agent for the Company in connection with the Placement (as defined in the Placement Agency Agreement).
Added
The Company paid the Placement Agent a cash fee based on the total size of the Placement according to a formula set forth in the Placement Agency Agreement. On September 4, 2025, the Company entered into an Inducement Restricted Stock Award Agreement with Erich Manz. Pursuant to the Agreement, the Company granted to Mr.
Added
Manz 400,000 restricted shares of Kopin common stock, subject to certain restrictions. 25% of the restricted shares will vest on each December 10 beginning in 2026, subject to Mr. Manz’s continued employment with the Company on the applicable vesting date.
Added
Company Stock Performance The following graph shows a five-year comparison of cumulative total shareholder return for the Company, the Nasdaq US Benchmark TR Index and the S&P 500 Information Technology index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

51 edited+36 added−30 removed31 unchanged
Biggest changeThe change in cash and cash equivalents and marketable securities was primarily due to the sale of common stock and prefunded warrants of $1.5 million in the fourth quarter of 2024, $25.2 million in the third quarter of 2024 and $7.2 million in the first quarter of 2024 which was partially offset by cash used in operations of $14.2 million.
Biggest changeThe increase in cash, cash equivalents, and restricted cash for the twelve months ended December 27, 2025 was primarily due to proceeds from the sales of marketable securities of $36.4 million, proceeds from issuance of preferred stock of $6.7 million partially offset by purchases of marketable securities of $15.2 million, cash used in operations of $15.5 million, capital expenditures of $1.4 million and proceeds from the sale of an equity investment of $0.3 million.
Because these are private companies that we do not control we may not be able to obtain all of the information we would want in order to make a complete assessment of the investment on a timely basis. Accordingly, our estimates may be revised if other information becomes available at a later date.
Because these are private companies that we do not control we may not be able to obtain all of the information we want in order to make a complete assessment of the investment on a timely basis. Accordingly, our estimates may be revised if other information becomes available at a later date.
Accounting for design, development and production contracts requires judgment relative to assessing risks, estimating contract revenues and costs and making assumptions for schedule and technical issues. Due to the size and nature of the work required to be performed on many of our contracts, the estimation of total revenue and cost at completion is complicated and subject to many variables.
Accounting for design, development and production contracts requires judgment relative to assessing risks, estimating contract revenues and costs and making assumptions for schedule and technical issues. Due to the size and nature of the work required to be performed in many of our contracts, the estimation of total revenue and cost at completion is complicated and subject to many variables.
Sales, value add and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. The Company also licenses its intellectual property (“IP”) through technology license agreements which provides the customer the right to use our IP as it exists at a point in time.
Sales, value add and other taxes we collect concurrently with revenue-producing activities are excluded from revenue. The Company also licenses its intellectual property (“IP”) through technology license agreements which provides the customer the right to use our IP as it exists at a point in time.
Industrial applications revenues represent customers who purchase our display products for use in headsets used for manufacturing, distribution, public safety, 3D metrology equipment and other industrial applications. Our 3D metrology customers are primarily located in Asia and they sell to Asian contract manufacturers who use the 3D metrology machines for quality control purposes.
Industrial applications revenues represent customers who purchase our display products for use in headsets used for manufacturing, distribution, public safety, 3D metrology equipment and other industrial applications. Our 3D metrology customers are primarily located in Asia, and they sell to Asia-based contract manufacturers who use the 3D metrology machines for quality control purposes.
Government, we typically receive interim payments either as work progresses, by achieving certain milestones or based on a schedule in the contract. We recognize a liability for these advance payments in excess of revenue recognized and present it as Contract liabilities and billings in excess of revenue earned on the balance sheets.
Government, we typically receive interim payments either as work progresses, by achieving certain milestones or based on a schedule in the contract. We recognize a liability for these advance payments in excess of revenue recognized and present it as Contract liabilities on the balance sheets.
R&D costs include staffing, purchases of materials and laboratory supplies, circuit design costs, fabrication and packaging of display products and allocated overhead. In fiscal year 2024, our Funded R&D expenditures were primarily related to our display products and defense systems and our Internal R&D was primarily related to the development of OLED displays.
R&D costs include staffing, purchases of materials and laboratory supplies, circuit design costs, fabrication and packaging of display products and allocated overhead. In fiscal year 2025, our Funded R&D expenditures were primarily related to our display products and defense systems, and our Internal R&D was primarily related to the development of OLED displays.
These agreements may include other performance obligations including the sale of product to the customer. The satisfaction of the Company’s performance obligation, and related recognition of revenue, occurs when the IP is delivered to the customer, the license period has begun and there are no additional performance obligations in the agreement.
These agreements may include other performance obligations including the sale of products to the customer. The satisfaction of the Company’s performance obligation, and related recognition of revenue, occurs when the IP is delivered to the customer, the license period has begun and there are no additional performance obligations in the agreement.
Seasonality Our revenues have not followed a seasonal pattern for the past three years and we do not anticipate any seasonal trend to our revenues in 2025. Contractual Obligations Under our former CEO’s (“Dr. Fan”) employment agreement, commencing in January 2023, Dr.
Seasonality Our revenues have not followed a seasonal pattern for the past three years and we do not anticipate any seasonal trend to our revenues in 2026. Contractual Obligations Under our former CEO’s (“Dr. Fan”) employment agreement, commencing in January 2023, Dr.
Under our current license agreements for which a royalty exists, we have recorded revenue when the related sales by our customer occurs because the performance obligation related to the delivery of the license to the customer has been satisfied.
Under our current license agreements for which a royalty exists, we have recorded revenue when the related sales by our customer occur because the performance obligation related to the delivery of the license to the customer has been satisfied.
If our actual results are less than projected or we need to raise capital for additional liquidity, we may be required to do additional equity financings, reduce expenses or enter into a strategic transaction.
If our actual results are less than projected or we need to raise capital for additional liquidity, we may be required to do additional equity financing, reduce expenses or enter into a strategic transaction.
For certain contracts with the U.S. Government, the Company recognizes revenue over time as we deliver goods or perform services 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 subject to liability clauses in the contract that allow the U.S.
Government, the Company recognizes revenue over time as we deliver goods or perform services 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 subject to liability clauses in the contract that allow the U.S.
Consequently, a strengthening of the U.S. dollar could increase the price in local currencies of our products in foreign markets and make our products relatively more expensive than competitors’ products that are denominated in local currencies, which could result in a reduction in sales or profitability in those foreign markets.
Our international sales are primarily denominated in U.S. dollars. Consequently, a strengthening of the U.S. dollar could increase the price in local currencies of our products in foreign markets and make our products relatively more expensive than competitors’ products that are denominated in local currencies, which could result in a reduction in sales or profitability in those foreign markets.
In some instances, the U.S. Government retains a small portion of the contract price until completion of the contract. The portion of the payments retained until final contract settlement is not considered a significant financing component because the intent is to protect the customer. For contracts with the U.S.
Government retains a small portion of the contract price until completion of the contract. The portion of the payments retained until final contract settlement is not considered a significant financing component because the intent is to protect the customer. For contracts with the U.S.
Our fixed-price contracts with the U.S. Government or other customers may result in revenue recognized in excess of amounts currently billed. We disclose the excess of revenues over amounts actually billed as Contract assets and unbilled receivables on the balance sheet. Amounts billed and due from our customers are classified as Accounts receivable on the balance sheets.
Our fixed-price contracts with the U.S. Government or other customers may result in revenue recognized in excess of amounts currently billed. We disclose the excess of revenues over amounts actually billed as Contract assets on the balance sheet. Amounts billed and due from our customers are classified as Accounts receivable on the balance sheets. In some instances, the U.S.
Because our fiscal year ends on the last Saturday of December, every seven years we have a fiscal year with 53 weeks. Our fiscal years 2024 and 2023 were 52-week years and fiscal year 2022 was a 53-week year. Revenues.
Because our fiscal year ends on the last Saturday of December, every seven years we have a fiscal year with 53 weeks. Our fiscal years 2025 and 2024 were 52-week years. Revenues.
Litigation damages were accrued as a result of the April 22, 2024 jury verdict that was entered against the Company awarding approximately $5.1 million in damages as well as recommending $19.7 million in disgorgement and exemplary damages. 33 Total Non-operating (Expense) Income.
Litigation Damages. Litigation damages were accrued as a result of the April 22, 2024, jury verdict that was entered against the Company awarding approximately $5.1 million in damages as well as recommending $19.7 million in disgorgement and exemplary damages.
For example, if the customer is located in Asia or if a U.S. customer has its Asian contract manufacturer order product from us and we deliver the product to Asia, we categorize both these sales as international.
We categorize our revenues as either domestic or international based upon the delivery destination of our product. For example, if the customer is located in Asia or if a U.S. customer has its Asian contract manufacturer order product from us and we deliver the product to Asia, we categorize both these sales as international.
In 2024 and 2023, our R&D revenues exceeded funded R&D expenses by approximately $2.2 million and $6.3 million, respectively. The decrease in license and royalty revenue in 2024 compared to 2023 is due to a decrease in royalties earned under IP license agreements for industrial wearable headsets.
In 2025 and 2024, our R&D revenues exceeded funded R&D expenses by approximately $1.1 million and $2.2 million, respectively. The decrease in license and royalty revenue in 2025 compared to 2024 is due to a decrease in royalties earned under IP license agreements for industrial wearable headsets. International product sales represented approximately 5% of product revenues for 2025 and 2024.
In 2023, we recorded $3.3 million of impairment losses on equity investments. In 2024, we recorded $0.2 million of foreign currency gains compared to $0.2 million of foreign currency losses recorded in 2023. Fiscal Year 2023 Compared to Fiscal Year 2022 In 2023, we recorded $3.3 million of impairment losses on equity investments.
In 2024, we recorded $1.6 million of impairment losses on equity investments. In 2025, we recorded $0.3 million in foreign currency gains compared to $0.2 million of foreign currency gains recorded in 2024.
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. We are unable to determine if we will be able to obtain all necessary components for fiscal 2025.
Our products go through extensive qualification processes and therefore our customers may not accept a replacement component. We are unable to determine if we will be able to obtain all necessary components for fiscal 2026.
Army’s Family of Weapon Sights-Individual and Joint Strike Fighter F-35 programs. We are also in development for new display systems for armored vehicles and a medical headset for surgeons. Our existing and new production programs are expected to increase production for the next several years.
We are also in development for new display systems for armored vehicles and a medical headset for surgeons. Our existing and new production programs are expected to increase production for the next several years.
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. 35 We have incurred net losses of $43.9 million, $19.7 million and $19.3 million for the fiscal years 2024, 2023 and 2022, respectively, and net cash outflows from operations of $14.2 million, $15.3 million and $17.7 million for the fiscal years ended 2024, 2023 and 2022, respectively.
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. 34 We had net income of of $2.6 million in fiscal year 2025 and a net loss of $43.9 million in fiscal year 2024, and net cash outflows from operations of $15.5 million and $14.2 million for the fiscal years ended 2025 and 2024, respectively.
Non-operating (expense) income for the fiscal years 2024, 2023 and 2022 were as follows: (In thousands) 2024 2023 2022 Total non-operating (expense) income $ (599 ) $ (2,415 ) $ 2,608 Fiscal Year 2024 Compared to Fiscal Year 2023 In 2024, we recorded $1.6 million of impairment losses on equity investments.
Non-operating income (expense) for the fiscal years 2025 and 2024 were as follows: (In thousands) 2025 2024 Total non-operating income (expense) $ 12,669 $ (599 ) Fiscal Year 2025 Compared to Fiscal Year 2024 In 2025, we recorded $11.1 million gain on deconsolidation and $0.8 million of impairment losses on equity investments.
In situations where control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. We use the cost-to-cost approach to measure the extent of progress towards completion of the performance obligation for our contracts because we believe it best depicts the transfer of assets to the customer.
We use the cost-to-cost approach to measure the extent of progress towards completion of the performance obligation for our contracts because we believe it best depicts the transfer of assets to the customer.
The margin improvement from thermal weapon sights was partially offset by lower margin contribution from industrial and training and simulation revenues due to their decline in sales. The Company also implemented several programs and hired additional employees to improve manufacturing quality and efficiencies.
Additionally, the margin improvements from efficiency gains within our thermal weapon sights product line were partially offset by lower margin contribution from industrial and training and simulation revenues due to their lower 2025 sales. The Company also implemented several programs and hired additional employees to improve manufacturing quality and efficiency.
Excluding a possible adverse result of the litigation discussed in Note 12 of the consolidated financial statements, we estimate we will have sufficient liquidity to fund operations at least through the second quarter of 2026. Nonetheless, we monitor the capital markets on an ongoing basis and may consider raising capital if favorable market conditions develop.
We estimate we will have sufficient liquidity to fund operations at least through the end of the second quarter of 2027. Nonetheless, we monitor the capital markets on an ongoing basis and may consider raising capital if favorable market conditions develop.
As a result, our financial position and results of operations are subject to exchange rate fluctuation in transactional and functional currency. 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 Japanese yen, Great Britain pound and the U.S. dollar.
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 Japanese yen, Great Britain pound and the U.S. dollar. 30 Cost of Product Revenues.
The following is a summary of our contractual lease payment obligations as of December 28, 2024: Payment due by period Total Less than 1 year 1-3 Years 4-5 years More than 5 years Operating Lease Obligations $ 2,372,040 768,841 1,603,199 — — 36
The following is a summary of our contractual lease payment obligations as of December 27, 2025: Payment due by period Total Less than 1 year 1-3 Years 4-5 years More than 5 years Operating Lease Obligations $ 1,603,198 732,610 870,588 — — 35
On January 27, 2023, we sold 17 million shares of registered common stock to certain investors and issued pre-funded warrants to purchase up to 6,000,000 shares of common stock at a public offering price of $0.99 per pre-funded warrant, which equals the public offering price per share of the common stock less the $0.01 per share exercise price of each pre-funded warrant.
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.
If our estimate of total contract costs or our determination of whether the customer agrees that a milestone achievement is incorrect, our revenue could be overstated or understated and the profits or loss reported could be subject to adjustment. 28 For our commercial customers, the Company’s revenue is recognized when obligations under the terms of a contract with our customer are satisfied and the Company transfers control of the products or performs services, which is upon delivery of the product to the customer or performance of the services.
For our commercial customers, the Company’s revenue is recognized when obligations under the terms of a contract with our customer are satisfied and the Company transfers control of the products or perform services, which is upon delivery of the product to the customer or performance of the services.
The decrease in Consumer applications in 2024 compared to 2023 was primarily due to a decrease in sales of our displays for consumer applications which was partially the result of our focusing the Company’s sales and marketing efforts on defense applications in 2023.
Sales of our displays for Consumer applications are primarily for use in thermal imaging products, recreational rifle and hand-held scopes. The decrease in Consumer applications in 2025 compared to 2024 was primarily due to our re-focusing the Company’s sales and marketing efforts on defense applications.
SG&A expenses for the fiscal years 2024, 2023 and 2022 were as follows: (In thousands, except percentages) 2024 2023 2022 Selling, general and administrative expense $ 22,845 $ 21,842 $ 17,965 Selling, general and administrative expense as a % of total revenue 45.4 % 54.1 % 37.9 % Fiscal Year 2024 Compared to Fiscal Year 2023 SG&A for 2024 increased as compared to 2023 primarily due to an increase of approximately $1.4 million in legal and professional fees and $0.2 million in excise taxes, partially offset by $0.4 million lower bad debt expense and $0.2 million decrease in non-cash stock-based compensation.
SG&A expenses for the fiscal years 2025 and 2024 were as follows: (In thousands, except percentages) 2025 2024 Selling, general and administrative expense $ 16,299 $ 22,845 Selling, general and administrative expense as a % of total revenue 41.4 % 45.4 % Fiscal Year 2025 Compared to Fiscal Year 2024 SG&A for 2025 decreased compared to 2024 primarily due to a decrease of approximately $6.4 million in legal fees and $0.1 million in professional fees.
Tax provision (In thousands) 2024 2023 2022 Tax provision $ (170 ) $ (156 ) $ (144 ) Fiscal Year 2024 Compared to Fiscal Year 2023 The provision for income taxes for the fiscal years ended 2024 and 2023 of approximately $(0.2) million was due to the accretion of additional potential liabilities related to uncertain tax positions and deferred tax liabilities for the Company’s former Korean subsidiary.
Tax provision (In thousands) 2025 2024 Tax provision $ (208) $ (170 ) Fiscal Year 2025 Compared to Fiscal Year 2024 The provision for income taxes for the fiscal years ended 2025 and 2024 of approximately $(0.2) million was due to the accretion of additional potential liabilities related to uncertain tax positions and deferred tax liabilities for the Company’s former Korean subsidiary. 33 Liquidity and Capital Resources At December 27, 2025 and December 28, 2024, we had cash and cash equivalents, including restricted cash, and marketable securities of $61.6 million and working capital of $33.6 million compared to $36.6 million and $18.9 million, respectively.
Cost of product revenues, which is comprised of materials, labor and manufacturing overhead related to the production of our products for fiscal years 2024, 2023 and 2022 were as follows: (In thousands, except percentages) 2024 2023 2022 Cost of product revenues $ 36,164 $ 24,952 $ 32,559 Cost of product revenues as a % of net product revenues 83.0 % 96.2 % 100 % Fiscal Year 2024 Compared to Fiscal Year 2023 Cost of product revenues decreased as a percentage of revenues in 2024 as compared to 2023 primarily due to increased unit volume of thermal weapon sights from higher sales in 2024 as compared to 2023 which resulted in a lower fixed overhead cost per unit.
Cost of product revenues, which are comprised of materials, labor and manufacturing overhead related to the production of our products for fiscal years 2025 and 2024 were as follows: (In thousands, except percentages) 2025 2024 Cost of product revenues $ 27,831 $ 36,164 Cost of product revenues as a % of net product revenues 84.2 % 83.0 % Fiscal Year 2025 Compared to Fiscal Year 2024 Cost of product revenues increased as a percentage of revenues in 2025 as compared to 2024 primarily due to lower overhead absorption due to lower total product volume, as well as higher one-time write downs of obsolete materials that offset gains in operational efficiencies.
Results of Operations We have two principal sources of revenues: product revenues and research and development (“R&D”) revenues. R&D revenues consist primarily of development contracts with agencies or prime contractors of the U.S. Government and commercial enterprises. We manufacture Active-matrix Liquid Crystal (“AMLCD”) transmissive and Liquid Crystal on Silicon (“LCOS”) reflective microdisplays.
R&D revenues consist primarily of development contracts with agencies or prime contractors of the U.S. Government and commercial enterprises. We manufacture Active-matrix Liquid Crystal (“AMLCD”) transmissive. and Liquid Crystal on Silicon (“LCOS”) reflective microdisplays. Our AMLCD display production is being performed entirely in our Westborough, Massachusetts facility. KEL manufactures our LCOS microdisplays in its facility located in Scotland.
In addition, if we earn royalties on sales from a customer, the royalties are categorized as domestic or international based on how the product revenues are categorized.
In addition, if we earn royalties on sales from a customer, the royalties are categorized as domestic or international based on how the product revenues are categorized. Our international sales decreased in 2025 as compared to 2024 due mainly to a decrease in sales of our products for 3D metrology application by Kopin Europe Ltd.
Internal R&D expense for 2023 decreased as compared to the prior year primarily due to decreased OLED development. Selling, General and Administrative. Selling, general and administrative (“SG&A”) expenses consist of the expenses incurred by our sales and marketing personnel and related expenses, and administrative and general corporate expenses.
Selling, general and administrative (“SG&A”) expenses consist of the expenses incurred by our sales and marketing personnel and related expenses, and administrative and general corporate expenses.
Sales of our products for Defense applications may be for a one-time purchase or for programs that run for several years.
Sales of our products for Defense applications may be for a one-time purchase or for programs that run for several years. Revenues from product sales to defense customers decreased in 2025 compared to 2024, primarily due to a decrease in shipments of our products for thermal weapon sight applications.
Our revenues by display application, which include product sales and amounts earned from research and development contracts, for fiscal years 2024, 2023 and 2022 by category, were as follows: (In thousands) 2024 2023 2022 Defense $ 41,249 $ 22,615 $ 24,780 Industrial 2,200 2,736 6,136 Consumer 25 573 1,497 Medical 103 — — Other product 320 13 7 R&D 5,996 13,455 14,357 License and royalties 442 1,002 624 Total Revenues $ 50,335 $ 40,394 $ 47,401 Fiscal Year 2024 Compared to Fiscal Year 2023 Sales of our products for Defense applications include systems used by the military both in the field and for training and simulation.
Our revenues by display application, which include product sales and amounts earned from research and development contracts, for fiscal years 2025 and 2024 by category, were as follows: (In thousands) 2025 2024 Defense $ 29,361 $ 41,249 Industrial 3,025 2,200 Consumer 9 24 Medical 594 103 Other product 78 — Net product revenues 33,067 43,576 R&D 4,590 5,997 License and royalties 410 762 ASC 606 revenues 38,067 50,335 Grant 858 — Collaboration 399 — Non ASC 606 revenues 1,257 — Total Revenues $ 39,324 $ 50,335 Fiscal Year 2025 Compared to Fiscal Year 2024 Sales of our products for Defense applications include systems used by the military both in the field and for training and simulation.
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.
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. Research and Development. Research and development (“R&D”) expenses are incurred in support of internal display development programs or programs funded by agencies or prime contractors of the U.S. Government and commercial partners.
For industrial and consumer purchase orders, we typically receive payments within 30 to 60 days of shipment of the product, although for some purchase orders, we may require advanced payment prior to shipment of the product. 27 The Company recognizes revenue from a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.
For industrial and consumer purchase orders, we typically receive payments within 30 to 60 days of shipment of the product, although for some purchase orders, we may require advanced payment prior to shipment of the product.
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: December 28, 2024 December 30, 2023 Domestic locations $ 36,491,339 $ 17,725,979 Foreign locations 56,984 95,547 Subtotal cash, cash equivalents, restricted cash and marketable securities held in U.S. dollars 36,548,323 17,821,526 Cash and cash equivalents held in other currencies and converted to U.S. dollars 81,455 81,159 Total cash, cash equivalents, restricted cash and marketable securities $ 36,629,778 $ 17,902,685 We have no plans to repatriate the cash and cash equivalents held in our foreign subsidiary KEL.
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: December 27, 2025 December 28, 2024 Domestic locations $ 61,627,146 $ 36,491,339 Foreign locations — 56,984 Subtotal cash, cash equivalents, restricted cash and marketable securities held in U.S. dollars 61,627,146 36,548,323 Cash and cash equivalents held in other currencies and converted to U.S. dollars — 81,455 Total cash, cash equivalents, restricted cash and marketable securities $ 61,627,146 $ 36,629,778 The domestic locations balance of $61.6 million for the fiscal year ended 2025 includes $25.3 million of restricted cash that is not available for current operating use.
Government to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. For contracts with commercial customers, while the contract may have a similar liability clause, our products historically have an alternative use and thus, revenue is recognized at a point in time.
For contracts with commercial customers, while the contract may have a similar liability clause, our products historically have an alternative use and thus, revenue is recognized at a point in time. 28 In situations where control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance obligation.
R&D expenses for fiscal years 2024, 2023 and 2022 were as follows: (In thousands) 2024 2023 2022 Funded $ 3,802 $ 7,177 $ 10,280 Internal 5,833 3,600 8,388 Total $ 9,635 $ 10,777 $ 18,668 Fiscal Year 2024 Compared to Fiscal Year 2023 Funded R&D expense for 2024 decreased as compared to 2023 primarily due to the completion of contracts for defense programs awarded prior to 2024.
R&D expenses for fiscal years 2025 and 2024 were as follows: (In thousands) 2025 2024 Funded $ 3,455 $ 3,802 Internal 6,692 5,833 Total $ 10,147 $ 9,635 Fiscal Year 2025 Compared to Fiscal Year 2024 Funded R&D expense for 2025 decreased as compared to 2024 primarily due to decreased spending on U.S. defense programs and programs previously in development are transitioning into production.
On September 23, 2024, we sold 37,550,000 shares of common stock and pre-funded warrants to purchase up to 4,000,000 shares of common stock at a public offering price of $0.64 per pre-funded warrants, for gross proceeds of $27.0 million before deducting underwriting discounts and offering expenses paid by the us of $1.8 million.
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.
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.
We continue to search for and procure all necessary components from our current vendors and from new vendors. In certain situations, we may procure alternative components or procure them at an increased cost. The inability to procure a single component will prevent the completion of our product and the ability to sell the product.
R&D revenues decreased in 2024 as compared to 2023 primarily due to decreased funding for display technology, armored vehicle targeting systems and other weapon system development for U.S. defense programs, and medical headset development. These contracts typically reimburse us for direct costs and allocated overhead and selling, general and administrative costs and in some cases profit.
R&D revenues decreased in 2025 as compared to 2024 primarily due to the timing of both starts of new programs and completion of our existing programs. This variance falls within the normal ebb and flow of funded programs. These contracts typically reimburse us for direct costs and allocated overhead and selling, general and administrative costs and in some cases profit.
Non-operating (expense) income is primarily composed of interest income, revaluation and impairment of equity investments, foreign currency transactions, remeasurement gains and losses incurred by our UK-based subsidiaries and other non-operating income items.
Non-operating Income (expense) is primarily composed of interest income, revaluation and impairment of equity investments, foreign currency transactions, gain due to the Deconsolidation of Kopin Europe Ltd, as defined and discussed in Note 1. and other non-operating income items.
Our net cash outflows from operations were partially a result of funding our ongoing investments in research and development which we believe will continue. We have in the past sold equity securities through an at-the-market offering and in the traditional fashion of significant equity offerings.
Our net cash outflows from operations were partially a result of funding our ongoing investments in research and development which we believe will continue. However, the Company raised approximately $45.8 million during the fiscal year ended December 27, 2025, through the issuance of common stock, pre-funded warrants and preferred stock.
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 2024 as compared to 2023 and 2022.
If we are unable to increase our prices due to the implementation or increase in tariffs, duties and other taxes our gross margin and overall profitability will be negatively impacted. Furthermore, order intake along with certain programmatic revenue recognition was hindered by several government shutdowns that imposed significant delays to our 2025 plan.
Removed
Our AMLCD display production is being performed entirely in our Westborough, Massachusetts facility. KEL, our wholly owned subsidiary, manufactures our LCOS microdisplays in its facility located in Scotland. Our OLED displays are designed by us and manufactured by third parties for us. We are a display supplier for the U.S.
Added
The Company recognizes revenue from a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. For certain contracts with the U.S.
Removed
Revenues from product sales to defense customers increased in 2024 compared to 2023, primarily due to an increase in shipments of our products for thermal weapon sight applications that was partially offset by a decrease in sales of our products for defense pilot helmets.
Added
Government to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process.
Removed
The decrease in Industrial/Enterprise applications revenues in 2024 compared to 2023 was primarily due to a decrease in sales to customers who use our display components in 3D metrology equipment and industrial headsets.
Added
If our estimate of total contract costs or our determination of whether the customer agrees that a milestone achievement is incorrect, our revenue could be overstated or understated and the profits or loss reported could be subject to adjustment.
Removed
Over the last few years, we believe our customers have been using lower priced and lower quality display products in their 3D AOI machines to compensate for lower demand, which has resulted in more price competition.
Added
Consolidation, Variable Interest Entities, and Deconsolidation of Kopin Europe We evaluate whether entities in which we hold an ownership or contractual interest should be consolidated in accordance with ASC 810, Consolidation. This evaluation requires significant judgment, including determining whether an entity is a variable interest entity (“VIE”) and, if so, whether we are the primary beneficiary.
Removed
We are introducing lower priced products in 2025 to increase sales, but if unit demand remains flat or decreases, our revenues from this market will decline. Sales of our displays for Consumer applications are primarily for use in thermal imaging products, recreational rifle and hand-held scopes.
Added
On October 16, 2025, following a strategic transaction with Theon International Plc (“Theon”), pursuant to which Theon acquired a 49% equity interest in Kopin Europe Ltd. (“Kopin Europe”) and the parties entered into a shareholder agreement, management reassessed its interest in Kopin Europe under the VIE model.
Removed
International product sales represented approximately 6% and 13% of product revenues for 2024 and 2023, respectively. We categorize our revenues as either domestic or international based upon the delivery destination of our product.
Added
Although we continue to hold a variable interest in Kopin Europe, management concluded that Kopin Europe is a VIE for which we are no longer the primary beneficiary.
Removed
Our international sales decreased in 2024 as compared to 2023 due to a decrease in sales of our products for 3D metrology application by our subsidiary, Kopin Europe Ltd., our OLED displays for consumer applications and industrial headset products manufactured overseas. Our international sales are primarily denominated in U.S. dollars.
Added
This conclusion required significant judgment, particularly in evaluating whether we have the power to direct the activities that most significantly impact Kopin Europe’s economic performance and whether we have the obligation to absorb losses or the right to receive benefits that could be potentially significant.
Removed
Foreign currency translation impact on our results, if material, is described in further detail under “Item 7A.
Added
In making this determination, management considered, among other factors, the governance provisions in the shareholder agreement, the substantive decision making rights held by Theon, the nature of the activities that most significantly affect Kopin Europe’s economic performance, and our exposure to Kopin Europe’s economics following the transaction. Decisions regarding those significant activities require the consent of both Kopin and Theon.
Removed
Quantitative and Qualitative Disclosures About Market Risk” section below. 30 Fiscal Year 2023 Compared to Fiscal Year 2022 Revenues from product sales to defense customers decreased in 2023 compared to 2022, primarily due to a decrease in shipments of our products for thermal weapon sight applications that was partially offset by an increase in sales of our products for defense pilot helmets and training and simulation programs.
Added
As a result of this assessment, Kopin Europe was deconsolidated from our consolidated financial statements, and we recognized a gain on deconsolidation. Our retained interest in Kopin Europe is accounted for under the equity method, and we elected the fair value option for this investment.
Removed
Revenues from product sales for industrial/enterprise applications decreased in 2023 compared to 2022 primarily due to a decrease in sales to customers who use our display components in 3D metrology equipment and industrial headsets.
Added
Because this assessment involves significant judgment and is sensitive to changes in facts and circumstances, including modifications to governance arrangements, ownership interests, or operating activities, different assumptions or changes in circumstances could result in a different consolidation conclusion in future periods. Results of Operations We have two principal sources of revenues: product revenues and research and development (“R&D”) revenues.
Removed
Revenues from product sales for consumer applications decreased in 2023 compared to 2022 primarily due to a decrease in sales of our OLED displays for consumer applications.
Added
Our OLED displays are designed by us with silicon wafer and OLED depostion by third parties, and final assembly and test by us or in some instances by our deposition partners. We are a display supplier for the U.S. Army’s Family of Weapon Sights-Individual and Joint Strike Fighter F-35 programs.
Removed
R&D revenues decreased in 2023 as compared to 2022 primarily due to decreased funding for new display technology development for U.S. defense programs and OLED display development, which was partially offset by increased funding for armor vehicle targeting system and medical headset development.
Added
The industrial applications market has seen new entrants over the last few years, which has led to increased price competition. We have introduced lower priced products in 2025 to compete with our competitors, but we expect this trend will continue and hence we are focusing our product and selling efforts on other more attractive market segments.
Removed
These contracts typically reimburse us for direct costs and allocated overhead and selling, general and administrative costs and in some cases profit. In 2023 and 2022, our R&D revenues exceeded funded R&D expenses by approximately $6.3 million and $4.1 million, respectively.
Added
As a result, our financial position and results of operations are subject to exchange rate fluctuation in transactional and functional currency.
Removed
The increase in license and royalty revenue in 2023 compared to 2022 is due to an increase in royalties earned under IP license agreements for industrial wearable headsets. International product sales represented approximately 13% and 22% of product revenues for 2023 and 2022, respectively.
Added
Several expected orders and subsequent revenue recognition have been delayed into 2026 due to substantial backlogs within the contracting pipeline. The issues associated with the global shortage of semiconductor circuit chips and other raw materials decreased in 2025 and 2024. However, we have identified several semiconductor components which continue to have long delivery times.
Removed
Our international sales decreased in 2023 as compared to 2022 due to a decrease in sales of our products for 3D metrology application by our subsidiary, KEL, our OLED displays for consumer applications and industrial headset products manufactured overseas. 31 Cost of Product Revenues.

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