KOPIN CORP

Previous wording

We have identified the following important factors that could cause actual results to differ materially from those discussed in our forward-looking statements. Such factors may be in addition to the risks described in Part I, Item 1A. “Risk Factors;” Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” and other parts of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, as amended. These factors include: our ability to source semiconductor components and other raw materials used in the manufacturing of our products amidst continued intermittent shortages, including from new and alternative suppliers; our ability to prosecute and defend our proprietary technology aggressively or successfully; our ability to recruit and retain personnel with experience and expertise relevant to our business; our ability to invest in research and development to achieve profitability even during periods when we are not profitable; any disruptions or delays in our supply chains, particularly with respect to semiconductor components, whether resulting from regional or global geopolitical developments, changes imposed by the new U.S. presidential administration, the current U.S. government shutdown, or otherwise; costs and outcomes relating to any disputes, governmental inquiries or investigations, regulatory proceedings, legal proceedings or litigation; our ability to continue to introduce new products in our target markets; our ability to generate revenue growth and positive cash flow, and reach profitability; the strengthening of the U.S. dollar and its effects on the price of our products in foreign markets; the impact of new regulations and customer demands relating to conflict minerals; our ability to obtain a competitive advantage in the wearable technologies market through our extensive portfolio of patents, trade secrets and non-patented know-how; our ability to grow within our targeted markets; the importance of small form factor displays in the development of defense, consumer, and industrial products such as thermal weapon sights, safety equipment, virtual and augmented reality gaming, training and simulation products and metrology tools; the suitability of our properties for our needs for the foreseeable future; and our need to achieve and maintain positive cash flow and profitability.

Current wording

We have identified the following important factors that could cause actual results to differ materially from those discussed in our forward-looking statements. Such factors may be in addition to the risks described in Part I, Item 1A. “Risk Factors;” Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” and other parts of our Annual Report on Form 10-K for the fiscal year ended December 27, 2025, as amended. These factors include: our ability to source semiconductor components and other raw materials used in the manufacturing of our products amidst continued intermittent shortages, including from new and alternative suppliers; our ability to prosecute and defend our proprietary technology aggressively or successfully; our ability to recruit and retain personnel with experience and expertise relevant to our business; our ability to invest in research and development to achieve profitability even during periods when we are not profitable; any disruptions or delays in our supply chains, particularly with respect to semiconductor components, whether resulting from regional or global geopolitical developments, changes imposed by the new U.S. presidential administration, or otherwise; costs and outcomes relating to any disputes, governmental inquiries or investigations, regulatory proceedings, legal proceedings or litigation; our ability to continue to introduce new products in our target markets; our ability to generate revenue growth and positive cash flow, and reach profitability; the strengthening of the U.S. dollar and its effects on the price of our products in foreign markets; the impact of new regulations and customer demands relating to conflict minerals; our ability to obtain a competitive advantage in the wearable technologies market through our extensive portfolio of patents, trade secrets and non-patented know-how; our ability to grow within our targeted markets; the importance of small form factor displays in the development of defense, consumer, and industrial products such as thermal weapon sights, safety equipment, virtual and augmented reality gaming, training and simulation products and metrology tools; the suitability of our properties for our needs for the foreseeable future; and our need to achieve and maintain positive cash flow and profitability.

Previous wording

*Revenues.*For the three and nine months ended September 27, 2025 and September 28, 2024, our revenues by display application, which include product sales and amounts earned from research and development contracts (“R&D”), were as follows:

Current wording

*Revenues.*For the three months ended March 28, 2026 and March 29, 2025, our revenues by display application, which include product sales and amounts earned from research and development contracts (“R&D”), were as follows:

Previous wording

The decrease in license and royalty revenue in the three and nine months ended September 27, 2025 as compared to the three and nine months ended September 28, 2024 is due to a decrease in royalties earned under IP license agreements for industrial wearable headsets.

Current wording

The slight decrease in license and royalty revenue in the three months ended March 28, 2026 as compared to the three months ended March 29, 2025 is due to a decrease in royalties earned under IP license agreements for industrial wearable headsets.

Previous wording

R&D revenues decreased in the three and nine months ended September 27, 2025 as compared to the three and nine months ended September 28, 2024 primarily due to decreases in funding for U.S. defense programs. We were awarded a $15.4 million Other Transaction Agreement (“OTA”) from the Office of the Secretary of War (“OSW”) through the U.S. Army Contracting Command (“ACC”) under the Industrial Base Analysis and Sustainment (“IBAS”) program. This contract is for the development of ultra-bright, full-color MicroLED displays optimized for ground soldier augmented reality (“AR”) applications. As a result of this contract and other contracts we have received, we believe funded research and development revenues will increase in fiscal year 2026 as compared to fiscal year 2025. This belief is based on assumption of meeting required milestones in these contracts which may be delayed or not met which can affect the timing of revenue recognition.

Current wording

Grant revenues increased in the three months ended March 28, 2026 as compared to the three months ended March 29, 2025 in connection with the Company’s government grant, in the fourth quarter of 2025, for the development of ultra-bright, full color MicroLED displays optimized for ground soldier augmented reality applications.

Previous wording

*Cost of Product Revenues.*Cost of product revenues, which is comprised of materials, labor and manufacturing overhead related to the production of our products for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:

Current wording

*Cost of Product Revenues.*Cost of product revenues, which is comprised of materials, labor and manufacturing overhead related to the production of our products for the three months ended March 28, 2026 and March 29, 2025 were as follows:

Previous wording

Research and Development. R&D expenses are incurred in support of internal display development programs and programs funded by agencies or prime contractors of the U.S. Government and commercial partners. R&D costs include staffing, purchases of materials and laboratory supplies, circuit design costs, fabrication and packaging of display products, and overhead. In fiscal year 2025, our R&D expenditures are related to our display products, overlay weapon sight modules and production automation. In addition, in October 2025 we sold a 49% interest in KEL to Theon. We expect to expand the operations of KEL through the development of new products. Funded and internal R&D expenses are combined in research and development expenses in the condensed consolidated statement of operations. R&D expenses for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:

Current wording

Research and Development. R&D expenses are incurred in support of internal display development programs and programs funded by agencies or prime contractors of the U.S. Government and commercial partners. R&D costs include staffing, purchases of materials and laboratory supplies, circuit design costs, fabrication and packaging of display products, and overhead. In fiscal year 2026, we expect our R&D expenditures to be related to our display products, overlay weapon sights and OLED display technologies. R&D expenses for the three months ended March 28, 2026 and March 29, 2025 were as follows:

Previous wording

Funded R&D expense for the three and nine months ended September 27, 2025 decreased as compared to the three and nine months ended September 28, 2024 primarily due to decreased spending on U.S. defense programs and programs previously in development are transitioning into production. Internal R&D expense increased due to an increase in internally developed technology focused on future process improvements. We were awarded a $15.4 million Other Transaction Agreement (“OTA”) from the Office of the Secretary of War (“OSW”) through the U.S. Army Contracting Command (“ACC”) under the Industrial Base Analysis and Sustainment (“IBAS”) program. This contract is for the development of ultra-bright, full-color MicroLED displays optimized for ground soldier augmented reality (“AR”) applications. As a result of this contract and other contracts we have received we believe funded research and development expenses will increase in fiscal year 2026 as compared to fiscal year 2025.

Current wording

Funded R&D expense for the three months ended March 29, 2026 increased as compared to the three months ended March 29, 2025 primarily due to the Company’s government grant for the development of ultra-bright, full color MicroLED displays optimized for ground soldier augmented reality applications. Funded R&D expense includes costs related to grant and collaboration income. Internal R&D expense decreased due to an increase in process improvements.

Previous wording

Selling, General and Administrative. Selling, general and administrative (“S,G&A”) expenses consist of the expenses incurred by our sales and marketing personnel and related expenses, and administrative and general corporate expenses. S,G&A expenses for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:

Current wording

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. SG&A expenses for the three months ended March 28, 2026 and March 29, 2025 were as follows:

Previous wording

*Other Expense, net.*Other expense, net, is primarily composed of interest income, foreign currency transactions, gains on fair value recording of investments and remeasurement gains and losses incurred by our U.K.-based subsidiary and other non-operating income items. Other expense, net, for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:

Current wording

*Other Income, net.*Other income, net, is primarily composed of interest income, foreign currency transactions, gains on fair value recording of investments and other non-operating income items. Other income, net, for the three months ended March 28, 2026 and March 29, 2025 were as follows:

Previous wording

Tax Provision. We recorded a provision for income taxes of less than $0.1 million and approximately $0.2 million in the three and nine months ended September 27, 2025, respectively. We recorded a provision for income taxes of approximately $0.1 million in the three and nine months ended September 28, 2024

Current wording

Tax Provision. We recorded a provision for income taxes of less than $0.1 million in the three months ended March 28, 2026 and March 29, 2025, respectively.

Previous wording

At September 27, 2025 and December 28, 2024, we had cash and cash equivalents, including restricted cash, and marketable securities of $27.6 million and working capital of $16.9 million compared to $36.6 million and $18.9 million, respectively.

Current wording

On March 28, 2026 and December 27, 2025, we had cash and cash equivalents, including restricted cash, and marketable securities of $59.5 million and working capital of $25.6 million compared to $61.6 million and $33.6 million, respectively.

Previous wording

The increase in cash, cash equivalents, and restricted cash for the nine months ended September 27, 2025 was primarily due to proceeds from the sales of marketable securities of $36.4 million partially offset by purchases of marketable securities of $15.2 million, cash used in operations of $7.7 million, capital expenditures of $1.3 million and proceeds from the sale of an equity investment of $0.3 million. The increase in cash, cash equivalents, and restricted cash for the three months ended September 28, 2024 was primarily due to proceeds from the sale of common stock and pre-funded warrants of $32.4 million and marketable securities of $6.9 million partially offset by purchases of marketable securities of $16.9 million, cash used in operations of $12.6 million, and capital expenditures of $0.3 million. For the nine months ended September 27, 2025, cash used in operating activities consisted of a net loss of $4.2 million, net cash used to fund changes in operating assets and liabilities of $3.0 million, and non-cash charges totaling $0.5 million, which was primarily related to accrued litigation damages offset by stock-based compensation, inventory reserves, depreciation, and investment impairment net of unrealized gains. For the nine months ended September 28, 2024, cash used in operating activities consisted of a net loss from operations of $41.9 million and net cash provided by changes in operating assets and liabilities of $1.9 million partially offset by non-cash charges totaling $31.2 million, which was primarily related to accrued litigation damages, stock-based compensation, investment impairment net of unrealized gains, inventory reserves, and depreciation. We expect that net cash used for or provided by operating activities to fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results, the timing of when we recognize revenue, and changes in components of working capital. Our cash and cash equivalents and liquidity could be adversely affected by any amounts that become payable in connection with any adverse results from any litigation we are, or may become, involved in.

Current wording

For the three months ended March 28, 2026, cash used in operating activities consisted of a net loss from operations of $3.8 million and net cash from changes in operating assets and liabilities of $4.7 million, which were partially offset by non-cash charges totaling $1.8 million, which was primarily related to stock-based compensation, and depreciation. For the three months ended March 28, 2026, net cash used in investing activities in the amount of $1.3 million consisted of capital expenditures. For the three months ended March 29, 2025 cash provided by investing activities was primarily related to net proceeds from the sale of marketable securities. We expect that net cash used for or provided by operating activities to fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results, the timing of when we recognize revenue, and changes in components of working capital. Our cash and cash equivalents and liquidity could be adversely affected by any amounts that become payable in connection with any adverse results from any litigation we are, or may become, involved in.

Previous wording

On September 29, 2025, the Company announced that it had entered into a securities purchase agreement (the “Purchase Agreement”) for a private investment in public equity financing (the “PIPE”) for 19,545,950 shares of its common stock, par value $0.01 per share (the “Shares”). The net proceeds to the Company from the offering were estimated to be approximately $38.1 million, after deducting placement agent fees and commissions and estimated offering expenses payable by the Company. The transaction was consummated on September 30, 2025.

Current wording

On September 29, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) for a private investment in public equity financing (the “PIPE”) for 19,545,950 shares of its common stock, par value $0.01 per share (the “Shares”). The net proceeds to the Company from the offering were approximately $38.1 million, after deducting placement agent fees and commissions and estimated offering expenses payable by the Company. The transaction was consummated on September 30, 2025.

Previous wording

On October 16, 2025, the Company announced that a $15 million strategic investment from Theon International Plc had been completed. Under the terms of the Agreements, Theon acquired a 49% interest in Kopin’s subsidiary, Kopin Europe Ltd. for $8.0 million and the parties entered into a licensing and development agreement and funding agreements relating to the joint development of military products. In addition, Theon purchased $7.0 million worth of shares of Series A Convertible Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”). Each share of the Preferred Stock is convertible into shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”) at an initial fixed conversion price of $3.00 per share, pursuant to the terms of the Certificate of Designation for Series A Convertible Preferred Stock of the Company (the “Certificate of Designations”). Kopin will have the ability to force the conversion of the preferred stock into common stock once Kopin’s common stock trades at $5.50 per share or higher for 10 Trading Days (as defined in the Certificate of Designation) within a 30 consecutive Trading Day period. The Preferred Stock will carry an annual dividend of at the base rate dividend rate of 4%, 2% payable in cash and 2% payable in stock.

Current wording

On October 16, 2025, the Company completed a $15 million strategic investment with Theon Under the terms of the Agreements, Theon acquired a 49% interest in Kopin’s subsidiary, Kopin Europe Ltd. for $8.0 million and the parties entered into a licensing and development agreement and funding agreements relating to the joint development of military products. In addition, Theon purchased $7.0 million worth of shares of Series A Convertible Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”). Each share of the Preferred Stock is convertible into shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”) at an initial fixed conversion price of $3.00 per share, pursuant to the terms of the Certificate of Designation for Series A Convertible Preferred Stock of the Company (the “Certificate of Designations”). The Company will have the ability to force the conversion of the preferred stock into common stock once the Company’s common stock trades at $5.50 per share or higher for 10 Trading Days (as defined in the Certificate of Designation) within a 30 consecutive Trading Day period. The Preferred Stock will carry an annual dividend of at the base rate dividend rate of 4%, 2% payable in cash and 2% payable in stock. With the close of this transaction, Kopin Europe Ltd. was deconsolidated from the Company’s consolidated financial statements. The consolidated statement of operations therefore includes nine months and sixteen days of activity related to Kopin Europe Ltd. The assets and liabilities of Kopin Europe Ltd. are no longer included within the Company’s consolidated balance sheets. Any discussions related to results, operations, and accounting policies associated with Kopin Europe Ltd. are referring to the current period through this transaction and prior periods as consolidated.

Previous wording

We expect to expend between $1.0 million and $2.0 million on capital expenditures in 2025.

Current wording

We expect to expend between $3.0 million and $5.0 million on capital expenditures in 2026.

Previous wording

Our critical accounting estimates are described in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition” of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, as amended. There have been no material changes to our critical accounting policies and estimates since December 28, 2024.

Current wording

Our critical accounting estimates are described in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition” of our Annual Report on Form 10-K for the fiscal year ended December 27, 2025.