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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 28, 2026

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 0-19882

KOPIN CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		04-2833935
State or other jurisdiction of incorporation or organization		(I.R.S. Employer Identification No.)

125 North Drive, Westborough, MA		01581-3335
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (508) 870-5959

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01		KOPN		Nasdaq Capital Market

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding as of May 12, 2026
Common Stock, par value $0.01		182,920,310

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

Kopin Corporation

INDEX

		Page No.
Part I – Financial Information

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3

	Condensed Consolidated Balance Sheets at March 28, 2026 (Unaudited) and December 27, 2025	3

	Condensed Consolidated Statements of Operations (Unaudited) for the three months ended March 28, 2026 and March 29, 2025	4

	Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the three months ended March 28, 2026 and March 29, 2025	5

	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Unaudited) for the three months ended March 28, 2026 and March 29, 2025	6

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 28, 2026 and March 29, 2025	7

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	33

Part II – Other Information		35

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 5.	Other Information	36

Item 6.	Exhibits	36

Signatures		37

Part 1. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

KOPIN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 28, 2026			December 27, 2025
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	34,148,324		$	36,350,083
Restricted cash and cash equivalents		25,338,612			25,277,063
Accounts receivable, net of allowance of $6,200 and $19,000 in 2026 and 2025, respectively		3,441,794			10,726,776
Contract assets		6,134,563			6,032,913
Grant income receivable		753,068			—
Inventory		4,977,813			5,505,775
Other receivable, at fair value		4,859,350			5,057,974
Prepaid expenses and other current assets		2,769,220			2,855,383
Total current assets		82,422,744			91,805,967
Property, plant and equipment, net		3,670,715			2,616,803
Operating lease right-of-use assets		1,329,689			1,488,231
Other assets		123,822			123,822
Equity method investment, at fair value		9,150,000			8,900,000
Equity investments		5,739,537			3,459,434
Total assets	$	102,436,507		$	108,394,257
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,713,343		$	5,315,998
Accrued payroll and expenses		3,178,401			2,231,848
Accrued warranty		41,000			1,165,000
Contract liabilities		1,008,635			1,168,009
Deferred grant income		—			2,688,627
Operating lease liabilities		661,355			648,469
Accrued post-retirement benefits		40,000			40,000
Other accrued liabilities		771,835			607,915
Deferred tax liabilities		416,583			422,458
Accrued litigation damages		19,700,000			19,700,000
Total current liabilities		31,531,152			33,988,324
Non-current contract liabilities, and asset retirement obligations		2,728			3,675
Operating lease liabilities, net of current portion		661,375			831,507
Accrued post-retirement benefits, net of current portion		150,646			190,696
Other long-term liabilities, net of current portion		1,673,672			1,706,411
Total liabilities		34,019,573			36,720,613
Commitments and contingencies (Note 15) and Litigation (Note 16)		-			-
Series A redeemable convertible preferred stock, par value $0.01, stated value $7,000 per share; 1,000 shares authorized, 1,000 issued, and outstanding at March 28, 2026 and December 27, 2025; aggregate liquidation preference of $7,028,000 at March 28, 2026 and $7,000,000 as of December 27, 2025		7,591,481			7,556,481
Stockholders’ equity:
Preferred stock, par value $.01 per share: authorized, 3,000 shares; no shares issued and outstanding as of 2026 and 2025		—			—
Common stock, par value $0.01; 275,000,000 shares authorized in 2026 and 2025, 184,280,028 issued in 2026 and 183,015,207 issued in 2025, and 176,903,857 outstanding at March 28, 2026 and December 27, 2025		1,776,753			1,776,753
Additional paid-in capital		463,611,163			463,150,835
Treasury stock 771,500 shares at March 28, 2026 and December 27, 2025, at cost		(1,389,174	)		(1,389,174	)
Accumulated deficit		(403,173,289	)		(399,421,251	)
Total stockholders’ equity		60,825,453			64,117,163
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity	$	102,436,507		$	108,394,257

See notes to unaudited condensed consolidated financial statements

KOPIN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended March 28, 2026			Three months ended March 29, 2025
Revenues:
Net product revenues	$	5,424,720		$	9,229,885
Research and development revenues		1,290,416			1,236,667
Grant income		3,441,695			—
Collaboration arrangement income		329,611			—
License and other revenues		64,928			71,940
Total revenues		10,551,370			10,538,492
Expenses:
Cost of product revenues		5,609,253			7,629,467
Research and development – Funded		3,806,233			638,719
Research and development – Internal		1,105,336			1,477,202
Selling, general and administrative		6,017,411			4,701,061
Total operating expenses		16,538,233			14,446,449
Loss from operations		(5,986,863	)		(3,907,957	)
Non-operating income (expense), net:
Interest income		94,162			446,448
Other (expense) income, net		(224,613	)		324,934
Foreign currency transaction gains		114,335			99,163
Loss on impairment of investments, net		—			(24,121	)
Gain on investments		2,307,961			—
Total non-operating income		2,291,845			846,424
Loss before provision for income taxes		(3,695,018	)		(3,061,533	)
Provision for income taxes		(57,020	)		(52,000	)
Net loss	$	(3,752,038	)	$	(3,113,533	)
Dividends and deemed dividends on Series A convertible preferred stock		(35,000	)		—
Net loss attributable to common stockholders		(3,787,038	)		(3,113,533	)
Net loss per share attributable to common stockholders:
Basic	$	(0.02	)	$	(0.02	)
Diluted	$	(0.02	)	$	(0.02	)
Weighted average number of common shares outstanding:
Basic		186,903,857			166,118,010
Diluted		186,903,857			166,118,010

See notes to unaudited condensed consolidated financial statements

KOPIN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF comprehensive loss

(Unaudited)

	Three months ended			Three months ended
	March 28, 2026			March 29, 2025
Net loss	$	(3,752,038	)	$	(3,113,533	)
Other comprehensive income, net of tax:
Foreign currency translation adjustments		—			(46,920	)
Unrealized holding (loss) gain on marketable securities		—			(214,507	)
Other comprehensive income, net of tax		—			(261,427	)
Comprehensive loss	$	(3,752,038	)	$	(3,374,960	)

See notes to unaudited condensed consolidated financial statements

KOPIN CORPORATION

Condensed Consolidated Statements of REDEEMABLE CONVERTIBLE PREFERRED STOCK and Stockholders’ Equity

(Unaudited)

	Shares		Amount		Shares		Amount		Capital			Stock			Income			Deficit			Equity
	Redeemable Convertible Preferred Stock				Common Stock				Additional Paid-in			Treasury			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital			Stock			Income			Deficit			Equity
Balance, December 27, 2025		1,000	$	7,556,481		177,675,361	$	1,776,753	$	463,150,835		$	(1,389,174	)		-		$	(399,421,251	)	$	64,117,163
Stock-based compensation expense		-		-		-		-		495,328			-			-			-			495,328
Other comprehensive income		-		-		-		-		-			-			-			-			-
Dividend on Series A Redeemable Convertible Preferred Stock		-		35,000		-		-		(35,000	)		-			-			-			(35,000	)
Net Income		-		-		-		-		-			-			-			(3,752,038	)		(3,752,038	)
Balance, March 28, 2026		1,000	$	7,591,481		177,675,361	$	1,776,753	$	463,611,163		$	(1,389,174	)		-		$	(403,173,289	)	$	60,825,453

Balance, December 28, 2024		-		-		156,430,896	$	1,564,308	$	422,087,837		$	(370,012	)	$	2,032,359		$	(402,032,930	)	$	23,281,562
Stock-based compensation expense		-		-		-		-		774,392			-			-			-			774,392
Other comprehensive (loss)		-		-		-		-		-			-			(261,427	)		-			(261,427	)
Other comprehensive Income (loss)		-		-		-		-		-			-			(261,427	)		-			(261,427	)
Dividend on Series A Redeemable Convertible Preferred Stock		-		-		-		-		-			-			-			-			-
Net income		-		-		-		-		-			-			-			(3,113,533	)		(3,113,533	)
Net income (loss)		-		-		-		-		-			-			-			(3,113,533	)		(3,113,533	)
Balance, March 29, 2025		-		-		156,430,896	$	1,564,308	$	422,862,229		$	(370,012	)	$	1,770,932		$	(405,146,463	)	$	20,680,994

See notes to unaudited condensed consolidated financial statements

KOPIN CORPORATION

Condensed Consolidated Statements of Cash Flows

(UNAUDITED)

	Three months ended March 28, 2026			Three months ended March 29, 2025
Cash flows from operating activities:
Net loss	$	(3,752,038	)	$	(3,113,533	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		247,023			219,501
Stock-based compensation		495,328			774,392
Non-cash (gain) loss on equity investments		(2,530,102	)		24,000
Income taxes		57,020			52,228
Foreign currency gains		(96,687	)		(65,901	)
Noncash provision for excess inventory		71,587			551,758
Changes in assets and liabilities:
Accounts receivable		7,213,292			4,775,817
Contract assets		(677,216	)		(2,273,850	)
Inventory		456,375			(444,726	)
Prepaid expenses and other current assets		(11,653	)		(773,832	)
Other assets		198,624			-
Accounts payable and accrued expenses		1,497,396			(2,953,405	)
Accrued warranty		(1,123,846	)		(122,389	)
Contract liabilities		(167,222	)		(64,261	)
Deferred grant income		(2,688,627	)		-
Net cash used in operating activities		(810,746	)		(3,414,201	)
Cash flows from investing activities:
Proceeds from sale of marketable securities		-			20,243,677
Other assets		-			(17	)
Capital expenditures		(1,301,349	)		(500,492	)
Purchases of marketable securities		-			(15,156,585	)
Net cash (used in) from investing activities		(1,301,349	)		4,586,583
Cash flows from financing activities:
Payment of dividends		(29,167	)		-
Net cash provided by financing activities		(29,167	)		-
Effect of exchange rate changes on cash		1,052			(588	)
Net change in cash, cash equivalents and restricted cash		(2,140,210	)		1,171,794
Cash, cash equivalents and restricted cash at beginning of year		61,627,146			15,210,120
Cash, cash equivalents and restricted cash at end of year	$	59,486,936		$	16,381,914
Supplemental disclosure of cash flow information:
Interest paid, net of amounts capitalized		-			-
Cash paid for income taxes		-			-
Accrued dividends		35,000			-

See notes to unaudited condensed consolidated financial statements

KOPIN CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Kopin Corporation is a leading developer and provider of innovative display, and application-specific optical solutions sold as critical components and subassemblies for defense, enterprise, medical, professional and consumer products. Kopin’s portfolio includes microdisplays, display modules, eyepiece assemblies, image projection modules, and vehicle mounted and head-mounted display systems that incorporate ultra-small high-resolution Active Matrix Liquid Crystal displays (“AMLCD”), Ferroelectric Liquid Crystal on Silicon (“FLCoS”) displays, MicroLED displays (“µLED”) and Organic Light Emitting Diode (“OLED”) displays, a variety of optics, and low-power ASICs.

1. BASIS OF PRESENTATION

The condensed consolidated financial statements of Kopin Corporation as of March 28, 2026 and for the three month periods ended March 28, 2026 and March 29, 2025 are unaudited and include all normal recurring adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the periods then ended. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2025, as amended. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year. As used in this report, the terms “we”, “us”, “our”, “Kopin” and the “Company” mean Kopin Corporation and its subsidiaries, unless the context indicates another meaning.

Principles of Consolidation

The condensed consolidated financial statements for the three-month periods ended March 28, 2026 and March 29, 2025 include the accounts of Kopin Corporation and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.

As of October 16, 2025, the Company no longer has a controlling financial interest in Kopin Europe Ltd. and the assets and liabilities and operations of Kopin Europe Ltd. were deconsolidated (“Deconsolidation”). The assets and liabilities of Kopin Europe Ltd. are no longer included within the Company’s December 27, 2025 consolidated balance sheet. Any discussions related to results, operations, and accounting policies associated with Kopin Europe Ltd. are referring to the periods prior to Deconsolidation. Subsequent to Deconsolidation, the Company accounted for our equity ownership interest in Kopin Europe Ltd. under the equity method of accounting using the fair value option under ASC 825, Financial Instruments (“ASC 825”), (See Note 3, “Strategic Investment from Theon”).

Liquidity

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company incurred a net loss of $3.8 million and net cash outflows from operations of $0.8 million for the three months ended March, 28, 2026. The Company’s net cash outflows from operations were partially a result of funding its ongoing investments in research and development, which management believes will continue, and production inefficiencies.

As of December 28, 2024, the Company had $24.7 million accrued related to a jury verdict in the matter of Blue Radios Inc. v. Kopin Corporation (see Note 16 Litigation). On September 5, 2025, a post-trial order for $19.7 million was awarded. As a result, the Company reduced the accrual to $19.7 million and recognized a benefit of $5.1 million in the consolidated Statements of Operations for the fiscal year ended December 27, 2025. 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 Company’s appeal to the verdict. To post the bond, the Company deposited $24.2 million in the bank, which consists of $23.0 million plus judgement, fees, and interest and $1.15 million in additional fees. The bank then issued a letter of credit to a surety company who then issued the bond to the court.

While the Company has appealed the verdict, the bond is available to satisfy the payment of the judgment, interest, and fees should the Company’s appeal be unsuccessful. Moreover, the Company raised approximately $51.2 million during the fiscal year ended December 27, 2025, through the issuance of common stock, pre-funded warrants and preferred stock. As of March 28, 2026, the Company had $34.1 million of cash and cash equivalents (excluding restricted cash), which the Company believes is sufficient to support its operations and satisfy its obligations for at least the next twelve months from the issuance of these financial statements. Nonetheless, we monitor the capital markets on an ongoing basis and may consider raising capital if favorable market conditions develop. 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. However, we can make no assurance that we will be able to raise additional capital, reduce expenses sufficiently, or enter into a strategic transaction on terms acceptable to us, or at all.

Revenue Recognition

Substantially all the Company’s product and license and other revenues are derived from the sales of components and subassemblies and the license of intellectual property for use in defense and industrial applications. The Company also has development contracts for the design, manufacture and or modification of products for the U.S. Government or prime contractors for the U.S. Government and for customers that expect to sell into the defense markets. The Company may offer technologies developed under these defense research and development contracts in products sold to industrial, medical and consumer markets. The Company’s contracts with the U.S. Government are typically subject to the Federal Acquisition Regulations (“FAR”) and are priced based on estimated or actual costs of producing goods. The FAR provides guidance on the types of costs that are allowable in establishing prices for goods provided under U.S. Government contracts. The pricing for non-U.S. Government contracts is based on the specific negotiations with each customer.

In accordance with ASC 606 Revenue from Contracts with Customers (“ASC 606”), revenue is recognized when a customer obtains control of promised products, and the amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these products and excludes taxes collected from customers which are subsequently remitted to government authorities. Pursuant to the contract terms, shipping and handling activities occur prior to the transfer of control of the Company’s products to customers and are therefore accounted for as fulfillment costs rather than as a separate performance obligation.

The Company applies the following five steps to guide revenue recognition:

Identify the contract(s) with a customer—A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the products to be transferred and identifies the payment terms related to those products, (ii) the contract has commercial substance and (iii) the Company determines that collection of substantially all consideration for products that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company’s contracts are typically in the form of a purchase order. For certain large customers, the Company may also enter into master service agreements that define general terms but are not customer commitments to purchase until coupled with a purchase order. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or published credit and financial information pertaining to the customer.

Identify the performance obligations in the contract—Performance obligations promised in a contract are identified based on the products and services that will be transferred. A product or service is distinct if both a) the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from the Company, and b) is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised products or services, the Company must apply judgment to determine whether the products or services meet the criteria to be distinct. If these criteria are not met the promised products or services are accounted for as a combined performance obligation.

Determine the transaction price—The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products to the customer. The Company historically does not have contracts with variable consideration but to the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.

	4)	Allocate the transaction price to the performance obligations in the contract—If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. The Company’s contracts do not typically contain multiple performance obligations that require an allocation of the transaction price to each performance obligation on a relative Stand-alone Sales Price (“SSP”).

	5)	Recognize revenue when (or as) the Company satisfies a performance obligation—The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised product or service to a customer.

Product Revenues

For certain contracts with prime contractors for the U.S. Government, the Company recognizes product revenue over time as the Company performs because of continuous transfer of control to the customer and the lack of an alternative use for the product. The continuous transfer of control to the customer is supported by liability clauses in the contract that allow the U.S. Government to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit and take control of any work in process and finished goods.

In situations where control transfers over time, product revenue is recognized based on the extent of progress towards completion of the performance obligation. The Company uses the cost-to-cost input method to measure the extent of progress towards completion of the performance obligation for its contracts because the Company believes it best depicts the transfer of assets to the customer. Under the cost-to-cost input method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation which includes the expected yield which is a significant judgment. Revenues are recorded proportionally as costs are incurred.

For certain contracts with prime contractors for the U.S. Government and commercial customers, while the contract may have a similar liability clause, the Company’s products historically have an alternative use and thus, revenue is recognized at a point in time upon transfer of control. Provisions for product returns and allowances are reductions in the transaction price and are recorded in the same period as the related revenues. The Company analyzes historical returns, current economic trends and changes in customer demand when evaluating the adequacy of sales returns and other allowances.

Research & Development Contracts

For most of the Company’s development contracts and contracts with the U.S. Government, the customer contracts with the Company to provide a significant service of integrating a set of components into a single unit. Since these components are not capable of being distinct or distinct within the context of the contract, the entire contract is accounted for as one performance obligation. If there is a follow-on production contract it is assessed whether it is a contract modification or a new contract.

In situations where control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The Company generally uses an input method using the cost-to-cost approach to measure the extent of progress towards completion of the performance obligation for its contracts because the Company believes it best depicts the transfer of assets to the customer. Under the cost-to-cost measure approach, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs, including material, labor and overhead. at completion of the performance obligation which requires management to use significant assumptions and judgements. Revenues are recorded proportionally as costs are incurred. The Company recognizes revenue at a point in time for certain contracts because the related performance obligations are satisfied upon delivery and transfer of control to the customer.

The Company’s fixed-price contracts with the U.S. Government or other customers may result in revenue recognized in excess of amounts currently billed. The Company discloses the excess of revenues over amounts actually billed as Contract assets and unbilled receivables on the consolidated balance sheets. Amounts billed and due from the Company’s customers are classified as Accounts receivable on the consolidated balance sheets. In some instances, the U.S. Government may retain a small portion of the contract price until completion of the contract. For contracts with the U.S. Government and some commercial customers, the Company typically receives payments either as work progresses or by achieving certain milestones or based on a schedule in the contract. The Company recognizes 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 consolidated balance sheets. Advanced payments typically are not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract and to protect the Company from the other party failing to adequately complete some or all of its obligations under the contract. For industrial and consumer purchase orders, the Company typically receives payments within 30 to 60 days of shipment of the product, although for some purchase orders, the Company may require an advanced payment prior to shipment of the product.

License and other revenues

The rights and benefits to the Company’s intellectual property are conveyed to certain customers through royalty-bearing technology license agreements. These sales-based royalties are recognized when they are earned. Revenues from sales-based royalties under license agreements are shown under License and other revenues on the Company’s consolidated statements of operations.

Contract Assets

Contract assets include unbilled amounts typically resulting from sales under contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized from customer arrangements, including licensing, exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time. Amounts may not exceed their net realizable value. Contract assets are generally classified as current. The Company classifies the noncurrent portion of contract assets under Other assets in its consolidated balance sheets.

Contract Liabilities

Contract liabilities consist of advance payments and billings in excess of revenue recognized for the contract.

Performance Obligations

The Company’s revenue recognition related to performance obligations that were satisfied at a point in time and over time for our contracts accounted for in accordance with ASC 606 were as follows:

Fiscal year ended

Three months ended

March 28, 2026

Three months ended

March 29, 2025

Point in time

Over time

The value of remaining performance obligations represents the transaction price of orders for which work has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts. As of March 28, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $12.2 million, which the Company expects to recognize revenue over the next 12 months. The remaining performance obligations expected to be recognized beyond 12 months of $7.2 million represent amounts to be earned under government contracts, which are subject to cancellation.

Government Grants

The Company accounts for government grants which are not considered exchange transactions in accordance with ASC 832, Government Assistance (“ASC 832”). These grants generally provide the Company with payments for certain types of expenditures in return for research and development activities. The Company recognizes the government grant as grant revenue in the consolidated statement of operations, as the grants relate to improving the design of an already existing product that the Company regularly sells to other customers. Such amounts are recognized on a systematic basis in proportion with the related qualifying costs incurred, applying judgment to determine when grant conditions are met and when grant proceeds are no longer subject to clawback or performance uncertainty. Proceeds received before recognition of the related grant revenues are recorded as deferred grant income within Other current liabilities in the consolidated balance sheet. Grant contract assets include unbilled amounts resulting from recognized grant revenues in excess of billings. Grant contract assets are generally classified as current assets in the consolidated balance sheet. Costs associated with such grants are recorded as a component of funded research and development expenses in the consolidated statements of operations.

Collaborative Arrangements

At the inception of an agreement, the Company evaluates if an agreement is a collaborative arrangement within the scope of ASC 808, Collaborative Arrangements (“ASC 808”). For collaborative arrangements that fall within the scope of ASC 808, the Company first determines which elements of the collaboration are deemed to be a performance obligation with a customer within the scope of ASC 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808 and are subject to the guidance in ASC 606, the Company applies the revenue recognition model under ASC 606 or other guidance, as deemed appropriate. The Company generally recognizes proceeds under collaborative arrangements within the scope of ASC 808 using a cost-to-cost methodology consistent with the underlying project economics within Collaboration revenues in the consolidated statements of operations. Proceeds received before recognition of the related collaboration revenues are recorded as deferred collaboration income within Other current liabilities in the consolidated balance sheet. Costs associated with such arrangements are recorded as a component of funded research and development expenses in the consolidated statements of operations.

2. ACCOUNTING STANDARDS

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”), which requires disaggregated disclosure of income statement expenses for public business entities (“PBEs”). The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for all PBEs for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-6”). ASU 2025-06 changes the accounting for internal-use software under Accounting Standards Codification (“ASC”) 350-40. ASU 2025-06 clarifies when to begin capitalizing costs. ASU 2025-06 is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and accompanying notes.

3. STRATEGIC INVESTMENT FROM THEON

On August 8, 2025, Kopin Corporation announced certain strategic agreements (collectively, the “Agreements”) for an aggregate of $15 million strategic investment from Theon International Plc (“Theon”). The Agreements closed on October 16, 2025, upon resolution of all related closing conditions, and the following related transactions were consummated:

	(i)	Theon acquired a 49% interest in Kopin’s subsidiary, Kopin Europe Ltd. for $8.0 million:
	(ii)	the parties entered into a licensing and collaboration agreement dated October 16, 2025 (the “License and Collaboration Agreement” or “LCA”) relating to the joint development of military products; and
	(iii)	Theon purchased $7.0 million for 1,000 shares of Series A Convertible Preferred Stock, par value $0.01 per share, of the Company (Refer to Note 8 for further information).

As a result of the sale of equity interests in Kopin Europe Ltd. and the existence of certain substantive participating rights provided to Theon, Kopin Corporation lost its controlling financial interest in Kopin Europe Ltd., a variable interest entity, as of October 16, 2025. Accordingly, it was determined that for accounting purposes the Company is not the primary beneficiary and elected to account for its equity method investment in Kopin Europe at fair value (Refer to Note 4 for further information).

The License and Collaboration Agreement between Kopin Corporation, Kopin Europe, and Theon, together with associated side letters, established a framework for joint development and commercialization of multiple product categories, including the DarkWave module, DarkWave subsystem, Theon End Product, certain MicroLED displays, and OLED displays. As of March 28, 2026 total committed funding received by Kopin Corporation from Theon under the LCA was $1.0 million. During the three months ended March 28, 2026, $0.3 million was recognized as Collaboration arrangement income in the Condensed Consolidated Statements of Operations.

4. FINANCIAL INSTRUMENTS

Fair Value Measurements

Financial instruments are categorized as Level 1, Level 2 or Level 3 based upon the method by which their fair value is computed. An investment is categorized as Level 1 when its fair value is based on unadjusted quoted prices in active markets for identical assets that the Company has the ability to access at the measurement date. An investment is categorized as Level 2 if its fair market value is based on quoted market prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, based on observable inputs such as interest rates, yield curves, or derived from or corroborated by observable market data by correlation or other means. The Company’s Level 2 investments are based on a yield to maturity models and market interest rates. An investment is categorized as Level 3 if its fair value is based on unobservable inputs for the asset.

The following table details the recurring fair value measurements of the Company’s financial assets:

	Total		Level 1		Level 2		Level 3
			Fair Value Measurement at March 28, 2026 Using:
	Total		Level 1		Level 2		Level 3
Money market fund holdings in cash equivalents	$	24,777,168		24,777,168		—		—
Certificates of deposit		500,000		—		500,000		—
Equity Investments		11,483,530		2,333,530		—		9,150,000
Other receivable		4,859,350		—		—		4,859,350
	$	41,620,048		27,110,698		500,000		14,009,350

The following table summarizes the changes in financial assets measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy for the three months ended March 28, 2026:

	Total		Equity Investments		Other Receivable
Beginning balance	$	13,957,974	$	8,900,000	$	5,057,974
Gain (loss) from changes in fair value		51,376		250,000		(198,624	)
Ending balance	$	14,009,350	$	9,150,000	$	4,859,350

	Total		Level 1		Level 2		Level 3
			Fair Value Measurement at December 27, 2025 Using:
	Total		Level 1		Level 2		Level 3
Money market fund holdings included in cash equivalents	$	24,746,957	$	24,746,957	$	—	$	—
Certificates of deposit		500,000		—		500,000		—
Equity Investments		10,129,063		1,229,063		—		8,900,000
Other receivable		5,057,974		—		—		5,057,974
	$	40,433,994	$	25,976,020	$	500,000	$	13,957,974

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of their short-term nature. There was $0.5 million certificates of deposit included in restricted cash and cash equivalents at December 27, 2025.

Marketable Securities

The Company validates the fair market values of the financial instruments below by using a model that incorporates current interest rates and remaining term. The restricted cash balance at March 28, 2026 and December 27, 2025 with the exception of the bonded restricted cash, is invested in a certificate of deposit and money market funds. Investments in available-for-sale marketable securities are as follows at March 28, 2026 and December 27, 2025:

	Amortized Cost				Unrealized Gain				Fair Value
	2026		2025		2026		2025		2026		2025
Certificates of deposit	$	500,000	$	-	$	—	$	—	$	500,000	$	500,000

The contractual maturity of the Company’s marketable debt securities were less than three months as of March 28, 2026 and less than one year as of December 27, 2025.

Equity Investments

The Company’s equity investments consisted of the following at March 28, 2026 and December 27, 2025:

SCHEDULE OF EQUITY INVESTMENTS

	March 28, 2026		December 27, 2025
Equity investments – measurement alternative	$	3,406,007	$	2,230,371
Equity investments – equity-method accounting, at fair value		9,150,000		8,900,000
Equity investments – at fair value		2,333,530		1,229,063
Equity investments	$	14,889,537	$	12,359,434

Equity Investments- Measurement Alternative

Equity investments rarely traded or not quoted will generally have less (or no) pricing observability and a higher degree of judgment utilized in measuring fair value. Initial measurement of equity investments occurs when an observable price for the equity investment is available. The Company adopted the measurement alternative for equity investments without readily determinable fair values, which is often referred to as cost method investments, adjusted for changes in observable market transaction. As a result, these investments are revalued upon occurrence of an observable price change for similar investments and for impairments. As of March 28, 2026 and December 27, 2025, the carrying value of these equity investments was $3.4 million and $2.2 million, respectively.

The Company has an equity investment in RealWear Inc. In the first quarter of 2025, the Company reviewed the financial condition and as a result, the Company recorded an impairment charge of less than $0.1 million. As of March 28, 2026, the Company owns an approximate 2.8% interest in this investment and the investment is valued at $0.1 million at March 28, 2026 and December 27, 2025.

The Company has an equity investment in Solos Incorporation (“Solos Inc.”). The carrying value of this equity investment was $0 and $0.2 million at March 28, 2026 and December 27, 2025 respectively.

The Company has an equity investment in HMDmd, a medical device company. The carrying value of this equity investment was $0.3 million at March 28, 2026 and December 27, 2025.

The Company has an equity interest in a Lenovo New Vision which it acquired through purchasing capital and contributing certain intellectual property. As of March 28, 2026, the Company owned an approximate 10% interest in this investment and the carrying value of this equity investment was $3.0 million at March 28, 2026 and $1.5 million at December 27, 2025.

Equity Investment – At Fair Value

The Company owns a minority interest in Global Communication Semiconductors, Inc. which is traded on the Taipei Exchange. The carrying value of this investment was $2.3 million and $1.2 million at March 28, 2026 and December 27, 2025, respectively.

Equity-Method Investment, At Fair Value

On October 16, 2025, the Company completed a $15 million strategic investment from Theon International Plc which included the sale of a 49% interest in Kopin’s subsidiary, Kopin Europe Ltd., to Theon International Plc. for $8.0 million. Following the transaction, it was determined that the Company no longer has a controlling financial interest in Kopin Europe Ltd., and the Company’s 51% equity interest is accounted for as an equity-method investment within the scope of ASC 323. The Company has elected to account for its equity interest in Kopin Europe Ltd. using the fair value option under ASC 825. As a result, changes in fair value are recognized as other income (expense) within gain (loss) on investments in the consolidated statements of operations. The fair value of this investment was measured using level 3 methodologies in the fair value hierarchy in accordance with ASC 820, including discounted cash flows and an estimated discount rate of 25.5%. The estimated fair value of this investment was $9.1 million at March 28, 2026.

Other Receivables

Historically, the Company has provided Kopin Europe Ltd. with a loan to fund operations. Following the Deconsolidation of Kopin Europe, Ltd. on October 16, 2025, the loan is no longer eliminated in consolidation. The loan has no stated repayment terms, bears interest at an annual rate of 2.0% and the outstanding balance was approximately $5.7 million at March 28, 2026 and December 27, 2025. The Company has elected to account for this specific instrument using the fair value option under ASC 825. As a result, changes in fair value are recognized as other income (expense) within gain (loss) on investments in the consolidated statements of operations. The fair value is measured using level 3 methodologies in the fair value hierarchy in accordance with ASC 820, including an expected term of between 0.1 and 5.8 years and an expected market yield between 13.00% and 17.00% as of the three months ended March 28, 2026. The estimated fair value of this investment was $4.9 million and $5.1 million at March 28, 2026 and December 27, 2025 respectively.

5. ACCOUNTS RECEIVABLE, NET

Accounts receivable consisted of the following:

SCHEDULE OF ACCOUNTS RECEIVABLE

	March 28, 2026			December 27, 2025
Accounts receivable	$	3,447,994		$	10,745,776
Less — allowance for credit losses		(6,200	)		(19,000	)
Total	$	3,441,794		$	10,726,776

Changes to the allowance for credit losses for the three months ended March 28, 2026 were as follows:


Balance, December 27, 2025	$	19,000
Write-offs	$	(12,800	)
Balance, March 28, 2026	$	6,200

6. INVENTORY

Inventories are stated at standard cost adjusted to approximate the lower of cost (first-in, first-out method) or net realizable value and consist of the following at March 28, 2026 and December 27, 2025:

SCHEDULE OF INVENTORY

	March 28, 2026		December 27, 2025
Raw materials	$	3,720,656	$	3,580,546
Work-in-process		122,124		1,400,579
Finished goods		1,135,033		524,650
Total	$	4,977,813	$	5,505,775

The Company recorded approximately $0.1 million of inventory adjustments for the three months ended March 28, 2026, primarily related to the scrapping of obsolete and excess inventory. These adjustments are recorded in the Consolidated Statement of Operations within Cost of Product Revenues.

7. NET LOSS PER SHARE

Basic net income or loss per share attributable to common stockholders is computed using the weighted-average number of shares of common stock outstanding during the period including the pre-funded warrants, less any nonvested restricted shares. The Company adjusts net income or loss attributable to common stockholders for dividends and deemed dividends on convertible preferred stock.

Diluted net income or loss per share is calculated using the treasury-stock method or the if-converted method, as applicable, for potentially dilutive instruments but such instruments are excluded from the calculation of diluted net loss per share, when their effect would be anti-dilutive for the periods presented.

Weighted average common shares outstanding used to calculate earnings per share are as follows:

	Three months ended March 28, 2026		Three months ended March 29, 2025
Weighted average common shares outstanding-basic		186,903,857		166,118,010
Stock options and non-vested restricted common stock		—		—
Convertible preferred stock (as converted to common stock)		—		—
Weighted average common shares outstanding-diluted		186,903,857		166,118,010

The following potentially dilutive common stock equivalents outstanding at the period-end were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

	Three months ended March 28, 2026		Three months ended March 29, 2025
Nonvested restricted common stock		6,604,670		6,317,670
Stock options		1,316,004		591,366
Convertible preferred stock (as converted to common stock)		2,354,333		—
Total		10,275,007		6,909,036

8. SERIES A CONVERTIBLE PREFERRED STOCK

As of March 28, 2026 and December 27, 2025, the authorized capital stock of the Company included 3,000 shares of $0.01 par value preferred stock, of which 1,500 shares have been designated as Series A convertible preferred stock.

On October 16, 2025, the Company issued and sold 1,000 shares of Series A convertible preferred stock at a price of $7,000 per share. The Series A convertible preferred stock was recorded based on its fair value at issuance. The Company assessed the convertible preferred stock for any embedded derivatives that would require bifurcation on the date of each issuance and concluded that there were no such features with more than a de minimis fair value.

As of March 28, 2026, the holders of the convertible preferred stock have the following rights and preferences:

Voting Rights—

The holders of the Series A convertible preferred stock are entitled to vote as a single class with the holders of the Company’s common stock with one vote for each share of common stock that the preferred stock is convertible into.

Dividends—

On each January 1 and July 1 of each year, the Company shall (a) pay a cash dividend at a rate of 2% per annum and (b) allow paid-in-kind dividends to accrue at a rate of 2% per annum. The dividend rates shall increase to 3% per annum upon certain events of noncompliance. Dividends on preferred stock shall accrue and accumulate whether or not declared and whether or not the Company has funds legally available for the payment of such dividends and shall compound semi-annually to the extent not paid in cash on or prior to such payment date.

Liquidation Rights—

In the event of any voluntary or involuntary liquidation, the holders of preferred stock are entitled to receive an amount equal to the greater of (a) the sum of (i) the purchase price per share and (ii) the accrued dividends on such share as of the liquidation or (b) an amount per share as would have been payable had all shares of preferred stock been converted into common stock immediately prior to such event.

After payment of such liquidation preferences, holders of common stock receive the remaining assets of the Company available for distribution to its stockholders.

Conversion—

The holders of the preferred stock may elect to convert shares of preferred stock into common stock at any time. Upon a holder’s election, each share of preferred stock shall be converted into such number of shares of common stock equal to the quotient of (a) the sum of (i) the purchase price per share and (ii) the accrued dividends on such share as of the conversion date, divided by (b) the optional conversion price in effect at the time of conversion, which is originally set at $3.00, adjustable for certain dilutive events.

The preferred stock may also be converted, at the Company’s election, if the trading price of the Company’s common stock is $5.50 or more (adjustable for certain dilutive events) for ten trading days during any thirty consecutive trading day period. Upon the Company’s election, each share of preferred stock shall be converted into such number of shares of common stock equal to the quotient of (a) the sum of (i) the purchase price per share and (ii) the accrued dividends on such share as of the conversion date, divided by (b) the mandatory conversion price in effect at the time of conversion, which is originally set at $4.40, adjustable for certain dilutive events.

If either an optional or mandatory conversion would result in the holders of the Series A convertible preferred stock beneficially owning greater than 9.99% of the common stock issued and outstanding, the Company must pay, in lieu of shares, an amount of cash per share equal to the volume weighted average per share price of a share of common stock on the trading day immediately preceding the conversion date and the relevant shares of preferred stock shall be deemed converted.

Redemption—

The preferred stock is redeemable at the election of the holders and is therefore classified outside of permanent equity. Upon the occurrence of certain events constituting a change of control, the Company has the option to redeem the preferred stock for an amount equal to the sum of (i) the purchase price per share and (ii) the accrued dividends on such share as of the redemption date. The Company shall not consummate an event constituting a change of control unless the Company provides each holder the option to receive an amount equal to the greater of (a) 150% of the sum of (i) the purchase price per share and (ii) the accrued dividends on such share as of the liquidation or (b) an amount per share as would have been payable had all shares of preferred stock been converted into common stock immediately prior to such event.

9. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Registered sale of equity securities

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 offering expenses payable by the Company. The transaction was consummated on September 30, 2025.

Non-Vested Restricted Common Stock

Restricted stock activity for the three-month period ended March 28, 2026 was as follows:

	Shares			Weighted Average Grant-Date Fair Value			Grant-Date Fair Value
Non-vested at December 27, 2025		5,339,847		$	1.41		$	7,551,683
Granted		1,320,773			2.45		$	3,234,760
Forfeited		(55,950	)		(1.28	)	$	(71,763	)
Vested		—			—		$	—
Non-vested at March 28, 2026		6,604,670		$	1.62		$	10,714,680
Expected to vest		6,604,670		$	1.62		$	10,714,680

Stock-Based Compensation

The following table summarizes stock-based compensation expense within each of the categories below as it relates to non-vested restricted common stock and stock options awards for the three months ended March 28, 2026 and March 29, 2025 (no tax benefits were recognized):

	Three Months Ended		Three Months Ended
	March 28, 2026		March 29, 2025
Cost of product revenues	$	50,008	$	139,437
Research and development		137,346		117,720
Selling, general and administrative		307,974		517,235
Total	$	495,328	$	774,392

Unrecognized compensation expense for non-vested restricted common stock as of March 28, 2026 totaled $10.7 million and is expected to be recognized over a weighted average period of approximately two and a half years.

Stock Options

During the three months ended March 28, 2026, an option award for 724,638 shares of the Company’s common stock was granted to the Chief Executive Officer. These options have a strike price of $3.21 and vest over a 4 year period. During the three months ended March 28, 2026, the Company recorded incremental stock-based compensation of less than $0.1 million as a result of the granting of stock option awards. As of March 28, 2026, there was approximately $1.8 million of unrecognized compensation cost related to unvested options. The cost is expected to be recognized over a weighted average period of 3.5 years.

The fair value of this options award was estimated using the Black-Scholes model using the following assumptions and had the following fair values:

	Three Months Ended
	March 28, 2026
Average risk-free interest rate		4.00	%
Expected dividend yield		None
Expected life (average, in years)		8.00
Expected volatility		90.00	%
Weighted average exercise price	$	3.21
Weighted average fair value	$	2.07

The Company’s 2026 average expected volatility and average expected life is based on the average of the Company’s historical information. The risk-free rate is based on the rate of U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of option grants. The Company has paid no dividends on its common stock in the past and does not anticipate paying any dividends in the future.

A summary of stock option activity for the period ended March 28, 2026 is as follows:

SUMMARY OF STOCK OPTION ACTIVITY

	Number of Options		Weighted Average Exercise Price		Intrinsic Value
Outstanding as of December 27, 2025		591,366	$	1.76	$	366,647
Granted		724,638	$	3.21		—
Outstanding as of March 28, 2026		1,316,004	$	2.56	$	—
Options exercisable as of March 28, 2026		230,092	$	2.05	$	—

10. ACCRUED WARRANTY

The Company typically warrants its products against defect for 12 to 18 months, however, for certain products a customer may purchase an extended warranty. A provision for estimated future costs and estimated returns for credit relating to such warranty is recorded in the period when product is shipped and revenue is recognized and is updated as additional information becomes available. The Company’s estimate of future costs to satisfy warranty obligations is based primarily on historical warranty expense experienced and a provision for potential future product failures. Changes in the accrued warranty for the three months ended March 28, 2026 were as follows:

SCHEDULE OF ACCRUED WARRANTY


Balance, December 27, 2025	$	1,165,000
Additions		10,000
Claims		(1,134,000	)
Balance, March 28, 2026	$	41,000

11. INCOME TAXES

The Company 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. As of March 28, 2026, the Company has available for tax purposes U.S. federal net operating loss carryforwards (“NOLs”) of approximately $119.1 million expiring 2026 through 2038 and $136.3 million that have an unlimited carryover period. The Company has recognized a full valuation allowance on its domestic and certain foreign net deferred tax assets due to the uncertainty of the realization of such assets. The Company recognizes both accrued interest and penalties related to its uncertain tax positions related to intercompany loan interest and potential transfer pricing exposure related to its foreign subsidiaries.

12. CONTRACT ASSETS AND LIABILITIES

Contract liabilities consist of advance payments and billings in excess of revenue recognized for the contract.

Net contract assets (liabilities) consisted of the following:

	March 28, 2026			December 27, 2025
ASC 606 Contract assets	$	6,134,563		$	6,032,913
ASC 606 Current contract liabilities and billings in excess of revenue earned		(1,008,635	)		(1,168,009	)
ASC 606 Noncurrent contract liabilities		(2,728	)		(7,465	)
Grant income receivable		753,068			—
Collaboration contract assets (recorded in Prepaid expenses and other current assets)		128,522			98,911
Deferred grant income		—			(2,688,627	)

The $0.1 million increase in the Company’s ASC 606 contract assets at March 28, 2026 as compared to December 27, 2025 was primarily due to an increase in amounts incurred for production of defense products.

The $0.2 million decrease in the Company’s contract liabilities from December 27, 2025 to March 28, 2026 was primarily due to satisfaction of performance obligations that were paid in advance.

The Company records ASC 606 contract assets or contract liabilities on a contract-by-contract basis. The Company records a contract asset for unbilled revenue when the Company’s performance exceeds amounts billed. The Company classifies the contract asset as either current or non-current based on the expected timing of the Company’s right to bill under the terms of the contract, which the Company expects to be able to bill for within one year.

Contract liabilities consist of payments received in advance of product shipment. The liability is removed with shipment of the product.

In the three months ended March 28, 2026, the Company recognized revenue of $0.6 million related to its contract liabilities at December 27, 2025. In the three months ended March 29, 2025, the Company recognized revenue of $0.1 million related to its contract liabilities at December 28, 2024.

The Company did not recognize impairment losses on its contract assets in the three months ended March 28, 2026, or the years ended December 27, 2025 or December 28, 2024.

The $0.8 million increase in Grant income receivables as of March 28, 2026 compared to December 27, 2025 reflects revenue in excess of billings during the three months ended March 28, 2026.

The $2.7 million decrease in Deferred grant income as of March 28, 2026 compared to December 27, 2025 reflects the recognition of previously deferred amounts upon satisfaction of the related grant conditions during the three months ended March, 28, 2026.

13. LEASES

The Company enters into operating leases primarily for: real estate, including for manufacturing, engineering, research, administration and sales facilities, and information technology (“IT”) equipment. At March 28, 2026 and December 27, 2025, the Company did not have any finance leases. Approximately all of its future lease commitments, and related lease liability, relate to the Company’s real estate leases. Some of the Company’s leases include options to extend or terminate the lease.

The components of lease expense were as follows:

SCHEDULE OF LEASE EXPENSE

	Three months ended		Three months ended
	March 28, 2026		March 29, 2025
Operating lease cost	$	184,402	$	216,147

At March 28, 2026, the Company’s future lease payments under non-cancellable leases were as follows:


2026 (excluding the three months ended March 28, 2026)	$	549,933
2027		669,255
2028		201,333
2029
2030
Total future lease payments		1,420,521
Less effects of discounting		(97,791	)
Total	$	1,322,730

The Company’s lease liabilities recognized in the Company’s condensed consolidated balance sheet at March 28, 2026 were as follows:

	March 28, 2026
Operating lease liabilities–current	$	661,355
Operating lease liabilities–noncurrent		661,375
Total lease liabilities	$	1,322,730

Supplemental cash flow information related to leases was as follows:

	Three months ended		Three months ended
	March 28, 2026		March 29, 2025
Cash paid for amounts included in the measurement of operating lease liabilities	$	182,677	$	215,549

Other information related to leases was as follows:

	March 28, 2026			March 29, 2025
Weighted Average Discount Rate–Operating Leases		6.77	%		6.80	%
Weighted Average Remaining Lease Term–Operating Leases (in years)		1.99			2.96

14. SEGMENTS AND DISAGGREGATION OF REVENUE

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its President and Chief Executive Officer. The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.

The CODM assesses performance and decides how to allocate resources and make operating decisions based on revenues, loss from operations, and net loss that are reported on the Consolidated Statements of Operations. These metrics are also used to monitor budget versus actual results. The measure of segment assets is reported on the Consolidated Balance Sheets as total assets. Revenues, expenses, and assets requiring disclosure in accordance with ASC 280, Segment Reporting, are also included in the accompanying Condensed Consolidated Financial Statements. See the Condensed Consolidated Statements of Operations for the three months ended March 28, 2026 and March 29, 2025 and the Consolidated Balance Sheets as of March 28, 2026 and December 27, 2025, for details.

Total long-lived assets by country at March 28, 2026 and December 27, 2025 were:

Total Long-lived Assets	March 28, 2025		December 27, 2025
United States	$	5,000,404	$	4,105,034
Long lived assets	$	5,000,404	$	4,105,034

The Company disaggregates its revenue from contracts with customers by geographic location and by display application, as it believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.

During the three months ended March 28, 2026 and March 29, 2025, the Company derived its sales from the following geographies:

	March 28, 2026					March 29, 2025
	Revenue		% of Total			Revenue		% of Total
United States	$	10,070,866		96	%	$	10,051,093		96	%
Other Americas		49,935		—			11,090		—
Total Americas		10,120,801		96			10,063,043		96
Asia – Pacific		70,970		1			258,191		2
Europe		359,599		3			217,258		2
Total Revenues	$	10,551,370		100	%	$	10,538,492		100	%

During the three months ended March 28, 2026 and March 29, 2025, the Company derived its sales from the following display applications:

	Three Months Ended March 28, 2026		Three Months Ended March 29, 2025
Defense	$	5,310,403	$	8,461,353
Industrial		64,157		391,688
Medical		—		358,920
Consumer and other product		50,160		17,924
Net product revenues		5,424,720		9,229,885
R&D		1,290,416		1,236,667
License and royalties		64,928		71,940
ASC 606 revenues		6,780,064		10,538,492
Grant		3,441,695		—
Collaboration		329,611		—
Non ASC 606 revenues		3,771,306		—
Total Revenues	$	10,551,370	$	10,538,492

15. COMMITMENTS AND CONTINGENCIES

The Company is subject to the possibility of loss contingencies arising in the ordinary course of business. Management considers the likelihood of loss related to an asset, or the incurrence of a liability, as well as its ability to reasonably estimate the amount of the loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired, or a liability has been incurred and the amount of loss can be reasonably estimated. The Company regularly evaluates current information available to determine whether such accruals should be adjusted and whether new accruals are required.

16. LITIGATION

The Company may engage in legal proceedings arising in the ordinary course of business. Claims, suits, investigations and proceedings are inherently uncertain, and it is not possible to predict the ultimate outcome of such matters and the Company’s business, financial condition, results of operations or cash flows could be affected in any particular period. In accordance with applicable accounting guidance, an accrual will be established for legal proceedings if and when those matters present loss contingencies that are both probable and estimable.

BlueRadios, Inc. v. Kopin Corporation, Civil Action No. 16-02052-JLK (D. Col.):

On August 12, 2016, BlueRadios, Inc. (“BlueRadios”) filed a complaint in the U.S. District Court for the District of Colorado, alleging that the Company breached a contract between it and BlueRadios concerning 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)). BlueRadios further alleged that the Company was unjustly enriched by its alleged misconduct, BlueRadios is entitled to an accounting to determine the amount of profits obtained by the Company as a result of its alleged misconduct, and the inventorship on at least ten patents or patent applications owned by the Company need to be corrected to list BlueRadios’ employees as inventors and thereby list BlueRadios as co-assignees of the patents. BlueRadios seeks monetary, declaratory, and injunctive relief, including for alleged non-payment of engineering retainer fees.

On 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. On May 22, 2024, the Company filed its Motion for Judgment as a Matter of Law or in the alternative for a New Trial, as well as two submissions arguing that the disgorgement and exemplary damages should not be awarded. That same day, BlueRadios filed motions seeking a permanent injunction prohibiting Kopin from selling any products that incorporate BlueRadios’ trade secrets, over $10.8 million in pre-judgment interest, and over $10.2 million in attorneys’ fees and costs. Briefing on those issues concluded on June 26, 2024. On September 25, 2024, the Company filed a supplemental brief on issue preclusion arguing that BlueRadios’ claims were untimely because of findings of fact made in BlueRadios, Inc. v. Hamilton, Brook, Smith & Reynolds, P.C., No. 1:21-cv-10488-DJC, ECF 268 (D. Mass. Sept. 18, 2024). That supplemental briefing concluded on October 29, 2024. As of December 28, 2024, the Company had estimated and accrued $24.8 million in probable and reasonably estimable damages for this matter.

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. 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 consolidated Statements of Operations for the fiscal year ended December 27, 2025.

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. The reduction in accrued legal fees is included within selling, general and administration in the Company’s consolidated financial statements for the fiscal year ended December 27, 2025.

On October 2, 2025, the Company posted a supersedeas bond for the amount of $23.0 million which consisted of the $19.7 million judgement, legal expenses, and interest that would accrue over the expected term of the appeal. To post the bond the Company entered into loan agreements (the “Agreements”) with its bank which provides the bank with a security interest in the $23.0 million plus $1.15 million in fees for a total of $24.2 million, which is classified as Restricted Cash. The bank then issued a Letter of Credit (LOC) to a surety company who then issued the bond to the court. The Agreement provides for standard representations and warranties and allows the bank to use the $23.0 million to satisfy the LOC in the event the LOC is called.

On October 7, 2025, the Company filed an appeal of the $19.7 million judgement against the Company in the matter of Blue Radios Inc. v. Kopin Corporation. As of March 28, 2026 and December 27, 2025, the Company has accrued $19.7 million for the judgment within Accrued litigation liability and has accrued approximately $0.4 million and $0.3 million, respectively, in related interest within Other accrued liabilities.

17. RELATED PARTY TRANSACTIONS

The Company may from time to time enter into agreements with shareholders, affiliates and other companies engaged in certain aspects of the display, electronics, optical and software industries as part of the Company’s business strategy. In addition, the wearable computing product market is relatively new and there may be other technologies the Company needs to purchase from affiliates in order to enhance its product offering.

The Company and RealWear have entered into agreements where the Company have agreed to supply display modules to RealWear, and license certain intellectual property to RealWear. In conjunction with these agreements the Company received an equity interest in RealWear, one-time $1.5 million license fees, paid as of December 2019, and will receive royalties of future product sales. See Note 6 for a description of the Company’s investments in RealWear. As of March 28, 2026, the Company owned approximately 2.8% of RealWear.

The Company has warrants to purchase shares of Preferred Stock of HMDmd. The fair value of the investment was determined to be $0.3 million as of March 28, 2026.

On October 16, 2025, Theon became a related party of the Company following its equity investment in Kopin Europe Limited (“Kopin Europe”), the Company’s majority-owned subsidiary, pursuant to a Subscription Agreement under which Theon subscribed for 21,281,350 ordinary shares of Kopin Europe for $8.0 million, resulting in 49% ownership of Kopin Europe.

Concurrent with the Subscription Agreement, Kopin, Kopin Europe, and Theon entered into a License and Collaboration Agreement (“LCA”), together with associated side letters, establishing a framework for joint development and commercialization of multiple product categories, including the DarkWave module, DarkWave subsystem, Theon End Product, certain MicroLED displays, and OLED displays.

During the three-month periods ended March 28, 2026 and March 29, 2025, the Company had the following transactions with related parties:

	Three months ended				Three months ended
	March 28, 2026				March 29, 2025
	Revenue		Purchases		Revenue		Purchases
RealWear, Inc.	$	63,270	$	—	$	71,940	$	—
HMDmd, Inc.		16,839		—		447,907		—
Lightning Silicon Technology, Inc.		1,658		—		—		38,850
Theon International PlC		329,611		—		—		—
	$	411,378	$	—	$	519,847	$	38,850

At March 28, 2026 and December 27, 2025, the Company had the following receivables and payables with related parties:

	March 28, 2026				December 27, 2025
	Receivables		Payables		Receivables		Payables
RealWear, Inc.	$	159,390	$	—	$	96,120	$	—
HMDmd, Inc.		16,839		—		—		—
Lightning Silicon Technology, Inc.		1,658		—		—		—
Kopin Europe Ltd.		4,859,350		—		5,057,974		—
Theon International PlC		300,000		—		300,000		—
	$	5,337,237	$	—	$	5,454,094	$	—

18. SUBSEQUENT EVENTS

On April 27, 2026, the Company entered into a Joint Development & License Agreement with Fabric.AI, Inc. (formerly StableX Technologies, Inc.) (“Fabric AI”), under which the parties agreed to jointly develop and commercialize certain GPU to GPU connectivity technologies. Fabric.AI is obligated to fund up to $15 million of development activities through successful demonstration, with additional production related funding subject to further negotiation. The agreement provides for joint ownership of Project Technology and includes the issuance of Convertible Preferred Stock to Kopin designed to give Kopin approximately 19.99% of Fabric.AI’s post financing equity capitalization.

On the same date, the Company also executed a Commercial Supply Agreement with Fabric.AI. Under this agreement, Kopin will manufacture and supply Products incorporating the jointly developed Project Technology, and Fabric.AI will act as the exclusive commercial market seller. The agreement outlines exclusivity terms, supply obligations, and a process for establishing manufacturing ramp up plans, pricing, and forecasting.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the safe harbor created by such sections. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “could,” “would,” “seeks,” “estimates,” and variations of such words and similar expressions, and the negatives thereof, are intended to identify such forward-looking statements. We caution readers not to place undue reliance on any such “forward-looking statements,” which speak only as of the date made, and advise readers that these forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, estimates, and assumptions by us that are difficult to predict. Various factors, some of which are beyond our control, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. All such forward-looking statements, whether written or oral, and whether made by us or on our behalf, are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this report, except as may otherwise be required by the federal securities laws.

We have identified the following important factors that could cause actual results to differ materially from those discussed in our forward-looking statements. Such factors may be in addition to the risks described in Part I, Item 1A. “Risk Factors;” Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” and other parts of our Annual Report on Form 10-K for the fiscal year ended December 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.

Overview

We are a leading developer, manufacturer and seller of miniature displays and optical lenses (our “components”) for sale as individual displays, components, modules or higher-level subassemblies. We also license our intellectual property through technology license agreements. Our component products are used in highly demanding high-resolution portable defense, enterprise and consumer electronic applications, training and simulation equipment and 3D metrology equipment. Our products enable our customers to develop and market an improved generation of products for these target applications.

The following discussion should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 27, 2025, as amended and our unaudited condensed consolidated financial statements included in this Form 10-Q.

Results of Operations

Our interim period results of operations and period-to-period comparisons of such results may not be indicative of our future operating results. Additionally, we use a fiscal calendar that may result in differences in the number of workdays in the current and comparable prior interim periods and could affect period-to-period comparisons. The following discussion of comparative results of operations among periods should be viewed in this context.

Revenues. For the three 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:

(In thousands)	Three Months Ended March 28, 2026		Three Months Ended March 29, 2025
Defense	$	5,310	$	8,461
Industrial		64		392
Medical		—		359
Consumer and other product		50		17
Net product revenues		5,424		9,229
R&D		1,290		1,237
License and royalties		65		72
ASC 606 revenues		6,779		10,538
Grant		3,442		—
Collaboration		330		—
Non ASC 606 revenues		3,772		—
Total Revenues	$	10,551	$	10,538

Sales of our products for Defense applications include systems used by the military both in the field and for training and simulation. 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 the three months ended March 28, 2026 as compared to the three months ended March 29, 2025, primarily due to lower production volumes of our products for thermal weapon sight applications and liquid crystal displays.

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. 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.

Sales of our displays for Consumer applications are primarily for use in thermal imaging products, recreational rifle and hand-held scopes.

R&D revenues increased slightly in the three months ended March 28, 2026 as compared to the three months ended March 29, 2025 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.

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.

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.

Collaboration revenues increased in the three months ended March 28, 2026 as compared to the three months ended March 29, 2025 as a result of the Company’s strategic partnership, in the fourth quarter of 2025, to develop the next generation clip on with augmented reality and thermal integration capabilities based on the Company’s micro-display technology.

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:

	Three Months Ended			Three Months Ended
(In thousands, except for percentages)	March 28, 2026			March 29, 2025
Cost of product revenues	$	5,609		$	7,629
Cost of product revenues as a % of net product revenues		103	%		83	%

The increase in cost of product revenues as a percentage of net product revenues for the three months ended March 28, 2026, compared to the three months ended March 29, 2025, was primarily attributable to reduced production efficiency and lower production volume. The Company believes the negative 3% product gross margin for the three months ended March 28, 2026 was an uncommon occurrence related to events in the quarter that we do not expect to reoccur. The Company expects a combination of customer price increases on follow-on customer purchase orders and improvements in production efficiency will result in positive product margins in future periods.

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:

	Three Months Ended		Three Months Ended
(In thousands)	March 28, 2026		March 29, 2025
Funded	$	3,806	$	639
Internal		1,105		1,477
Total research and development expense	$	4,911	$	2,116

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.

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:

	Three Months Ended			Three Months Ended
(In thousands, except for percentages)	March 28, 2026			March 29, 2025
Selling, general and administration expense	$	6,017		$	4,701
Selling, general and administration expense as a % of revenues		57	%		45	%

SG&A increased for the three months ended March 28, 2026 as compared to the three months ended March 29, 2025 primarily due to increases in professional fees and accrued performance-based compensation.

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:

	Three Months Ended		Three Months Ended
(In thousands)	March 28, 2026		March 29, 2025
Other income, net	$	2,292	$	846

During the three months ended March 28, 2026, we had a gain on an investment of approximately $2.3 million. During the three months ended March 29, 2025, we sold an investment for a gain of approximately $0.3 million and had interest income of approximately $0.4 million.

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.

Net Loss. We incurred a net loss of $3.8 million during the three months ended March 28, 2026 compared to a net loss of $3.1 million during the three months ended March 29, 2025.

Liquidity and Capital Resources

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.

	Three Months Ended			Three Months Ended
	March 28, 2026			March 29, 2025
Net cash used for operating activities	$	(810,746	)	$	(3,414,201	)
Net cash (used in) provided by investing activities		(1,301,349	)		4,586,583
Net cash used in by financing activities		(29,167	)		—
Effect of exchange rate changes on cash		1,052			(588	)
(Decrease) increase in cash and equivalents	$	(2,140,210	)	$	1,171,794

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.

Equity offerings

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.

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.

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:

	March 28, 2026		December 27, 2025
Domestic locations	$	59,486,936	$	61,627,646
Foreign locations		—		—
Subtotal cash, cash equivalents, restricted cash and marketable securities held in U.S. dollars		59,486,936		61,627,646
Cash and cash equivalents held in other currencies and converted to U.S. dollars		—		—
Total cash, cash equivalents, restricted cash and marketable securities	$	59,486,936	$	61,627,646

The domestic locations balance of $59.5 million and $61.6 million for the period ended March 28, 2026 and fiscal year ended 2025 includes $25.3 million of restricted cash that is not available for current operating use.

The manufacturing operations at our Korean facility, Kowon, have ceased and Kowon was liquidated at fiscal year ended 2018. We have recorded deferred tax liabilities for any additional withholding tax that may be due to the Korean government upon Kowon’s final tax return acceptance.

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

We had a net loss of $3.8 million for the three months ended March 28, 2026 and a net loss of $3.1 million in fiscal year 2025, and net cash outflows used in operations of $0.8 million and $3.4 million for the three months ended March 28, 2026 and for the fiscal year ended 2025, respectively. Moreover, the Company has posted a bond to satisfy the court’s verdict of $19.7 million in damages and anticipated accrued interest in the matter of BlueRadios vs. Kopin Corporation, Inc. should the Company’s appeal be unsuccessful (refer to Note 16 of our consolidated financial statements for more information). As of March 28, 2026, the Company had $34.1 million of cash and cash equivalents (excluding restricted cash), which the Company believes is sufficient to support its operations and satisfy its obligations for at least the next twelve months from the issuance of these financial statements. We estimate we will have sufficient liquidity to fund operations into the third quarter of 2027. Nonetheless, we monitor the capital markets on an ongoing basis and may consider raising capital if favorable market conditions develop. 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. However, we can make no assurance that we will be able to raise additional capital, reduce expenses sufficiently, or enter into a strategic transaction on terms acceptable to us, or at all.

Critical Accounting Estimates

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We invest our excess cash in high-quality U.S. Government, government-backed (e.g., Fannie Mae, FDIC guaranteed bonds and certificates of deposit) and corporate debt instruments, which bear lower levels of relative risk. We believe that the effect, if any, of reasonably possible near-term changes in interest rates on our financial position, results of operations and cash flows should not be material to our cash flows or income. It is possible that interest rate movements would increase our unrealized gain or loss on debt securities. We are exposed to the effects of exchange rates in the purchase of certain raw materials, which are in U.S. dollars, but the price on future purchases is subject to change based on the relationship of the Japanese yen to the U.S. dollar. We do not currently hedge our foreign currency exchange rate risk. We estimate that any market risk associated with our international operations or investments is unlikely to have a material adverse effect on our business, financial condition or results of operation. Our portfolio of marketable securities is subject to interest rate risk and the credit rating of our investments may be affected by the underlying financial health of the guarantors of our investments. We use silicon wafers but do not enter into forward or futures hedging contracts to mitigate against risks related to the price of silicon.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of March 28, 2026, the Company conducted an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial officer, respectively) regarding the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of March 28, 2026, as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The term “disclosure controls and procedures” means controls and other procedures that are designed to ensure that information required to be disclosed by the Company in reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the requisite time periods and that such disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act are accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our management concluded that, as of March 28, 2026, our disclosure controls and procedures were not effective as of March 28, 2026 due to the following material weaknesses which were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 27, 2025, and continue to exist as of March 28, 2026:

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

There were no changes in our internal control over financial reporting during the quarter ended March 28, 2026, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

BlueRadios, Inc. v. Kopin Corporation, Civil Action No. 16-02052-JLK (D. Col.):

On September 5, 2025, a post-trial order was entered in the U.S. District Court for the District of Colorado in the matter of BlueRadios, Inc. v. Kopin Corporation, Inc. finding for the plaintiff, BlueRadios, Inc. and awarding approximately $19.7 million in damages but denying a permanent injunction and prejudgment interest. In the second quarter of 2024, the Company had estimated and accrued $24.8 million in probable and reasonably estimable damages for this matter. As a result of the post-trial order, the Company reduced the accrual to $19.7 million and recognized a benefit of $5.1 million for the reduction in the accrual in the condensed consolidated Statements of Operations for the three and nine months ended September 27, 2025.

On 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. 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.

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. 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. 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.

On October 7, 2025, the Company filed an appeal for 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 1A. Risk Factors

Our business and financial results are subject to numerous risks and uncertainties. As a result, the risks and uncertainties discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 27, 2025, should be carefully considered. There have been no material changes in the assessment of our risk factors from those set forth in our Annual Report on Form 10-K for the fiscal year ended December 27, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

We did not sell any securities during the three months ended March 28, 2026 that were not registered under the Securities Act.

Item 5. Other Information

Rule 10b5-1 Trading Arrangements

During the quarter ended March 28, 2026, none of the Company’s directors or officers informed the Company of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (each as defined in Item 408(a) of Regulation S-K).

Item 6. Exhibits

Exhibit No.		Description

10.1		Joint Development and License Agreement, dated April 27, 2026, by and between the Company and Fabric AI, Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 28, 2026)
31.1		Certification of Michael Murray, Chief Executive Officer, filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) *
31.2		Certification of Erich Manz, Chief Financial Officer, filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) *
32.1		Certification of Michael Murray, Chief Executive Officer, furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) **
32.2		Certification of Erich Manz, Chief Financial Officer, furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) **

101.INS		Inline XBRL Instance Document*
101.SCH		Inline XBRL Taxonomy Extension Schema Document*
101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document*
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB		Inline XBRL Taxonomy Label Linkbase Document*
101.PRE		Inline XBRL Taxonomy Presentation Linkbase Document*
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*	Filed herewith
**	Furnished and not filed herewith

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at March 28, 2026 (Unaudited) and December 27, 2025, (ii) Condensed Consolidated Statements of Operations (Unaudited) for the three months ended March 28, 2026 and March 29, 2025, (iii) Condensed Consolidated Statement of Comprehensive Loss (Unaudited) for the three months ended March 28, 2026 and March 29, 2025, (iv) Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the three months ended March 28, 2026 and March 29, 2025, (v) Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 28, 2026 and March 29, 2025, and (vi) Notes to Unaudited Condensed Consolidated Financial Statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	KOPIN CORPORATION (Registrant)

Date: May 12, 2026	By:	/S/ MICHAEL MURRAY
		Michael Murray
		President, Chief Executive Officer
		(Principal Executive Officer)

Date: May 12, 2026	By:	/S/ ERICH MANZ
		Erich Manz
		Treasurer and Chief Financial Officer
		(Principal Financial and Accounting Officer)

KOPIN CORP 10-Q