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 September 28, 2024

☐	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 November 12, 2024
Common Stock, par value $0.01		158,800,600

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 September 28, 2024 (Unaudited) and December 30, 2023	3

	Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 28, 2024 and September 30, 2023	4

	Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the three and nine months ended September 28, 2024 and September 30, 2023	5

	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the three and nine months ended September 28, 2024 and September 30, 2023	6

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 28, 2024 and September 30, 2023	7

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	23

Part II – Other Information		24

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 6.	Exhibits	25

Signatures		26

Part 1. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

KOPIN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 28, 2024			December 30, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	14,530,593		$	5,710,685
Restricted cash		1,050,000			500,000
Marketable securities, at fair value		21,712,243			11,692,000
Accounts receivable, net of allowance of $1,015,000 in 2024 and $1,025,000 in 2023		9,233,935			9,706,036
Contract assets and unbilled receivables		8,274,538			3,409,809
Inventory		6,555,359			7,601,806
Prepaid taxes		84,885			85,572
Prepaid expenses and other current assets		1,561,710			1,124,635
Total current assets		63,003,263			39,830,543
Property, plant and equipment, net		2,016,452			2,163,417
Operating lease right-of-use assets		2,305,433			2,504,909
Other assets		124,925			124,925
Equity investments		3,129,434			4,688,522
Total assets	$	70,579,507		$	49,312,316

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,385,635		$	4,947,338
Accrued payroll and expenses		1,724,776			1,701,506
Accrued warranty		2,675,000			2,160,000
Contract liabilities and billings in excess of revenues earned		268,468			916,826
Operating lease liabilities		653,546			651,503
Accrued post-retirement benefits		227,500			790,000
Other accrued liabilities		1,971,681			1,702,681
Customer deposits		102,481			408,156
Deferred tax liabilities		470,884			470,884
Accrued legal expenses		6,666,717			2,129,421
Accrued litigation damages		24,800,000			—
Total current liabilities		43,946,688			15,878,315
Noncurrent contract liabilities and asset retirement obligations		372,903			278,112
Operating lease liabilities, net of current portion		1,634,390			1,832,982
Accrued post-retirement benefits, net of current portion		279,996			319,996
Other long-term obligations, net of current portion		1,619,016			1,494,016
Total liabilities		47,852,993			19,803,421
Commitments and contingencies (Note 14)		-			-
Stockholders’ equity:
Preferred stock, par value $.01 per share: authorized, 3,000 shares; none issued		—			—
Common stock, par value $.01 per share: authorized, 200,000,000 shares in 2024 and 150,000,000 in 2023; issued 158,769,894 shares in 2024 and 114,253,818 shares in 2023; outstanding 153,182,916 in 2024 and 112,251,416 in 2023, respectively		1,532,589			1,123,220
Additional paid-in capital		420,066,150			385,411,542
Treasury stock (76,064 shares in 2024 and 70,635 in 2023, at cost)		(103,181	)		(103,127	)
Accumulated other comprehensive income		1,316,545			1,232,294
Accumulated deficit		(400,085,589	)		(358,155,034	)
Total stockholders’ equity		22,726,514			29,508,895
Total liabilities and stockholders’ equity	$	70,579,507		$	49,312,316

See notes to unaudited condensed consolidated financial statements

KOPIN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended			Three months ended			Nine months ended			Nine months ended
	September 28, 2024			September 30, 2023			September 28, 2024			September 30, 2023
Revenues:
Net product revenues	$	10,922,470		$	5,506,193		$	31,001,866		$	19,172,302
Research and development revenues		2,268,072			4,956,386			4,338,366			11,737,062
Other revenues		129,066			135,918			348,440			907,180
Total revenues		13,319,608			10,598,497			35,688,672			31,816,544
Expenses:
Cost of product revenues		8,316,904			5,437,953			25,543,806			17,759,117
Research and development		2,596,649			3,089,935			6,537,065			8,534,411
Selling, general and administration		5,206,880			4,798,598			19,706,613			15,912,848
Litigation damages		—			—			24,800,000			—
Total expenses		16,120,433			13,326,486			76,587,484			42,206,376
Loss from operations		(2,800,825	)		(2,727,989	)		(40,898,812	)		(10,389,832	)
Other (expense) income
Interest income		220,017			299,506			619,534			623,971
Other income		6,176			31,608			25,000			104,403
Loss on impairment of investments, net		(903,609	)		—			(1,637,895	)		(3,327,347	)
Foreign currency transaction gains (losses)		142,899			(14,438	)		86,618			(153,442	)
Total other (expense) income, net		(534,517	)		316,676			(906,743	)		(2,752,415	)
Loss before provision for income taxes		(3,335,342	)		(2,411,313	)		(41,805,555	)		(13,142,247	)
Tax provision		(125,000	)		(39,000	)		(125,000	)		(117,000	)
Net loss	$	(3,460,342	)	$	(2,450,313	)	$	(41,930,555	)	$	(13,259,247	)
Net loss per share
Basic and diluted	$	(0.03	)	$	(0.02	)	$	(0.34	)	$	(0.12	)
Weighted average number of common shares outstanding
Basic and diluted		124,318,056			110,360,814			121,944,597			108,436,146

See notes to unaudited condensed consolidated financial statements

KOPIN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF comprehensive loss

(Unaudited)

	Three months ended			Three months ended			Nine months ended			Nine months ended
	September 28, 2024			September 30, 2023			September 28, 2024			September 30, 2023
Net loss	$	(3,460,342	)	$	(2,450,313	)	$	(41,930,555	)	$	(13,259,247	)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments		(25,035	)		(10,229	)		(24,795	)		31,955
Unrealized holding gain (loss) on marketable securities		18,236			(54,175	)		109,046			(72,382	)
Other comprehensive (loss) income, net of tax		(6,799	)		(64,404	)		84,251			(40,427	)
Comprehensive loss	$	(3,467,141	)	$	(2,514,717	)	$	(41,846,304	)	$	(13,299,674	)

See notes to unaudited condensed consolidated financial statements

KOPIN CORPORATION

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

	Shares		Amount		Capital			Stock			Income			Deficit				Equity
	Common Stock				Additional Paid-in			Treasury			Accumulated Other Comprehensive			Accumulated				Total Kopin Corporation Stockholders’
	Shares		Amount		Capital			Stock			Income			Deficit				Equity
Balance, December 30, 2023		112,322,051	$	1,123,220	$	385,411,542		$	(103,127	)	$	1,232,294		$	(358,155,034	)	-	$	29,508,895
Vesting of restricted stock		20,064		200		(200	)		-			-			-		-		-
Stock-based compensation expense		-		-		734,928			-			-			-				734,928
Other comprehensive income		-		-		-			-			1,836			-				1,836
Issuance of common stock, net of costs		3,080,000		30,800		7,211,781			-			-			-				7,242,581
Net loss		-		-		-			-			-			(32,548,215	)	-		(32,548,215	)
Balance, March 30, 2024		115,422,115	$	1,154,220	$	393,358,051		$	(103,127	)	$	1,234,130		$	(390,703,249	)	-	$	4,940,025
Vesting of restricted stock		226,395		2,264		(2,264	)		-			-			-		-		-
Stock-based compensation expense		-		-		676,418			-			-			-				676,418
Other comprehensive income		-		-		-			-			89,214			-				89,214
Net loss		-		-		-			-			-			(5,921,998	)	-		(5,921,998	)
Balance, June 29, 2024		115,648,510	$	1,156,484	$	394,032,205		$	(103,127	)	$	1,323,344		$	(396,625,247	)	-	$	(216,341	)
Vesting of restricted stock		1,070		11		(11	)		-			-			-		-		-
Stock-based compensation expense		-		-		1,212,946			-			-			-				1,212,946
Issuance of common stock and pre-funded warrants, net of costs		37,609,400		376,094		24,821,010			(54	)		-			-				25,197,050
Issuance of common stock, net of costs		37,609,400		376,094		24,821,010			(54	)		-			-				25,197,050
Other comprehensive income		-		-		-			-			(6,799	)		-				(6,799	)
Net loss		-		-		-			-			-			(3,460,342	)	-		(3,460,342	)
Balance, September 28, 2024		153,258,980	$	1,532,589	$	420,066,150		$	(103,181	)	$	1,316,545		$	(400,085,589	)	-	$	22,726,514

	Shares		Amount		Capital			Stock			Income		Deficit			Equity			Interest			Equity
	Common Stock				Additional Paid-in			Treasury			Accumulated Other Comprehensive		Accumulated			Total Kopin Corporation Stockholders’			Noncontrolling			Total Stockholders’
	Shares		Amount		Capital			Stock			Income		Deficit			Equity			Interest			Equity
Balance, December 31, 2022		92,954,159	$	929,540	$	360,567,631		$	(103,127	)	$	1,176,068	$	(338,406,815	)	$	24,163,297		$	(172,682	)	$	23,990,615
Vesting of restricted stock		17,500		175		(175	)		-			-		-			-			-			-
Stock-based compensation expense		-		-		194,190			-			-		-			194,190			-			194,190
Other comprehensive income		-		-		-			-			6,227		-			6,227			-			6,227
Issuance of common stock and pre-funded warrants, net of costs		17,000,000		170,000		21,165,000			-			-		-			21,335,000			-			21,335,000
Issuance of common stock, net of costs		17,000,000		170,000		21,165,000			-			-		-			21,335,000			-			21,335,000
Acquisition of noncontrolling interest		-		-		(172,682	)		-			-		-			(172,682	)		172,682			-
Net loss		-		-		-			-			-		(2,628,555	)		(2,628,555	)		-			(2,628,555	)
Balance, April 1, 2023		109,971,659	$	1,099,715	$	381,753,964		$	(103,127	)	$	1,182,295	$	(341,035,370	)	$	42,897,477		$	-		$	42,897,477
Vesting of restricted stock		404,966		4,050		(4,050	)		-			-		-			-			-			-
Stock-based compensation expense		-		-		1,191,257			-			-		-			1,191,257			-			1,191,257
Other comprehensive income		-		-		-			-			17,750		-			17,750			-			17,750
Net loss		-		-		-			-			-		(8,180,379	)		(8,180,379	)		-			(8,180,379	)
Balance, July 1, 2023		110,376,625	$	1,103,765	$	382,941,171		$	(103,127	)	$	1,200,045	$	(349,215,749	)	$	35,926,105		$	-		$	35,926,105
Balance		110,376,625	$	1,103,765	$	382,941,171		$	(103,127	)	$	1,200,045	$	(349,215,749	)	$	35,926,105		$	-		$	35,926,105
Vesting of restricted stock		90,227		903		(903	)		-			-		-			-			-			-
Stock-based compensation expense		-		-		958,335			-			-		-			958,335			-			958,335
Other comprehensive loss		-		-		-			-