KOPIN CORP
For the period ended Dec 27, 2025. Filed Apr 13, 2026.
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FY2025 · Filed Apr 13, 2026
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Item 9A. Controls and Procedures
| Item 9A. | Controls and Procedures |
|---|
Disclosure Controls and Procedures
In connection with filing the Annual Report on Form 10-K, management, under the supervision of and with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by our Annual Report on Form 10-K for the fiscal year ended December 27, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective due to the material weaknesses identified by management and described below.
During 2025, management continued to implement enhancements to the Company’s internal control over financial reporting designed to address the material weakness previously disclosed in our 2024 Annual Report on Form 10-K. These remediation efforts included strengthening financial review controls, enhancing documentation procedures, and expanding internal oversight of key accounting processes. While these actions have improved the control environment, management determined that the remediation process was not fully completed as of December 27, 2025, and therefore the previously identified material weaknesses have not yet been fully remediated. In addition, management identified an additional material weakness during 2025, as described below.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s Board of Directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and include those policies and procedures that:
| ● | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
| ● | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made in accordance with authorizations of management and directors of the Company; and |
| ● | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our internal control over financial reporting as of December 27, 2025, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013 framework). Based on that evaluation, our management concluded that, as of December 27, 2025, internal control over financial reporting was not effective based on criteria established in the Internal Control-Integrated Framework issued by the COSO for reasons discussed below.
We identified control deficiencies, that when aggregated, constitute material weaknesses as follows:
| ● | Design and operating effectiveness of information technology general computer controls in the areas of user access and program change-management for certain information technology systems that are critical to capturing, processing, and reporting financial transactions. These ineffective information technology controls contributed to (i) improper segregation of duties among certain business process controls and (ii) ineffective data validation of spreadsheets and system-generated reports. |
| ● | Management identified a material weakness in the Company’s internal control over financial reporting related to the design and operation of controls over the period-end financial reporting and disclosure process. Specifically, management did not design, implement, and maintain sufficiently precise review controls, including controls over the completeness and accuracy of information used in the operation of controls and the retention of evidence of review, to achieve timely, complete, and accurate accounting and disclosures in multiple financial statement areas, including prepaid expenses and other current assets, stockholders’ equity, share-based compensation, certain investments, and income taxes. |
| ● | Management did not design and implement certain business process controls related to the revenue cycle, including appropriate controls over contract accounting reviews and completeness and accuracy of required disclosures. |
| ● | Management did not design and implement certain business process controls related to the accounting evaluation of significant unusual transactions and completeness and accuracy of required disclosures. |
Remediation Activities
Management is actively engaged in the implementation of a remediation plan to implement measures designed to improve our internal control over financial reporting to remediate these material weaknesses with oversight from the Audit Committee of the Board of Directors.
Changes in Internal Control Over Financial Reporting
Except as described above related to the identification of the material weaknesses, there were no changes in our internal control over financial reporting during the fourth quarter of the fiscal year ended December 27, 2025, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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