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 June 29, 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 August 7, 2024
Common Stock, par value $0.01		120,968,103

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 June 29, 2024 (Unaudited) and December 30, 2023	3

	Condensed Consolidated Statements of Operations (Unaudited) for the three and six months ended June 29, 2024 and July 1, 2023	4

	Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the three and six months ended June 29, 2024 and July 1, 2023	5

	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the three and six months ended June 29, 2024 and July 1, 2023	6

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 29, 2024 and July 1, 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	22

Item 4.	Controls and Procedures	22

Part II – Other Information		23

Item 1.	Legal Proceedings	23

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 6.	Exhibits	24

Signatures		25

Part 1. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

KOPIN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 29, 2024			December 30, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	10,042,847		$	5,710,685
Restricted cash		1,050,000			500,000
Marketable debt securities, at fair value		7,587,014			11,692,000
Accounts receivable, net of allowance of $988,000 in 2024 and $1,025,000 in 2023		7,406,272			9,706,036
Contract assets and unbilled receivables		6,523,002			3,409,809
Inventory		5,649,665			7,601,806
Prepaid taxes		88,433			85,572
Prepaid expenses and other current assets		1,972,872			1,124,635
Total current assets		40,320,105			39,830,543
Property, plant and equipment, net		2,143,235			2,163,417
Operating lease right-of-use assets		2,477,774			2,504,909
Other assets		124,925			124,925
Equity investments		3,982,385			4,688,522
Total assets	$	49,048,424		$	49,312,316

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,713,542		$	4,947,338
Accrued payroll and expenses		1,945,532			1,701,506
Accrued warranty		2,674,000			2,160,000
Contract liabilities and billings in excess of revenues earned		198,291			916,826
Operating lease liabilities		672,038			651,503
Accrued post-retirement benefits		415,000			790,000
Other accrued liabilities		1,460,402			1,702,681
Customer deposits		331,766			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		45,348,172			15,878,315
Noncurrent contract liabilities and asset retirement obligations		356,560			278,112
Operating lease liabilities, net of current portion		1,786,021			1,832,982
Accrued post-retirement benefits, net of current portion		279,996			319,996
Other long-term obligations, net of current portion		1,494,016			1,494,016
Total liabilities		49,264,765			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 121,137,538 shares in 2024 and 114,253,818 shares in 2023; outstanding 115,577,875 in 2024 and 112,251,416 in 2023, respectively		1,156,484			1,123,220
Additional paid-in capital		394,032,205			385,411,542
Treasury stock (70,635 shares in 2024 and 2023, at cost)		(103,127	)		(103,127	)
Accumulated other comprehensive income		1,323,344			1,232,294
Accumulated deficit		(396,625,247	)		(358,155,034	)
Total stockholders’ equity		(216,341	)		29,508,895
Total liabilities and stockholders’ equity	$	49,048,424		$	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			Six months ended			Six months ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
Revenues:
Net product revenues	$	11,054,030		$	6,011,393		$	20,079,396		$	13,666,109
Research and development revenues		1,170,329			3,884,225			2,070,294			6,780,676
Other revenues		112,064			564,238			219,374			771,262
Total revenues		12,336,423			10,459,856			22,369,064			21,218,047
Expenses:
Cost of product revenues		8,685,328			5,697,063			17,226,902			12,321,164
Research and development		1,839,663			3,132,259			3,940,416			5,444,476
Selling, general and administration		7,267,868			6,466,120			14,499,733			11,114,250
Litigation damages		—			—			24,800,000			—
Total expenses		17,792,859			15,295,442			60,467,051			28,879,890
Loss from operations		(5,456,436	)		(4,835,586	)		(38,097,987	)		(7,661,843	)
Other (expense) income
Interest income		226,677			222,700			399,517			324,465
Other income		18,867			35,765			18,824			72,795
Loss on impairment of investments		(734,286	)		(3,327,347	)		(734,286	)		(3,327,347	)
Foreign currency transaction gains (losses)		23,180			(236,911	)		(56,281	)		(139,004	)
Total other expense, net		(465,562	)		(3,305,793	)		(372,226	)		(3,069,091	)
Loss before provision for income taxes		(5,921,998	)		(8,141,379	)		(38,470,213	)		(10,730,934	)
Tax provision		—			(39,000	)		—			(78,000	)
Net loss	$	(5,921,998	)	$	(8,180,379	)	$	(38,470,213	)	$	(10,808,934	)
Net loss per share
Basic and diluted	$	(0.05	)	$	(0.07	)	$	(0.32	)	$	(0.10	)
Weighted average number of common shares outstanding
Basic and diluted		121,400,739			109,911,244			120,757,868			107,473,813

See notes to unaudited condensed consolidated financial statements

KOPIN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF comprehensive loss

(Unaudited)

	Three months ended			Three months ended			Six months ended			Six months ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
Net loss	$	(5,921,998	)	$	(8,180,379	)	$	(38,470,213	)	$	(10,808,934	)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments		2,444			32,190			240			42,184
Unrealized holding gain (loss) on marketable securities		86,770			(14,440	)		90,810			(18,207	)
Other comprehensive income, net of tax		89,214			17,750			91,050			23,977
Comprehensive loss	$	(5,832,784	)	$	(8,162,629	)	$	(38,379,163	)	$	(10,784,957	)

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	)

	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
Balance		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

KOPIN CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

SEC Form 10-Q filed by Kopin Corporation