# KOPIN CORP (KOPN) Informational only - not investment advice. CIK: 0000771266 SIC: 3674 Semiconductors & Related Devices SIC breadcrumb: [Manufacturing](/division/D/) > [Electronic And Other Electrical Equipment And Components, Except Computer Equipment](/major-group/36/) > [SIC 3674 Semiconductors & Related Devices](/industry/3674/) Latest 10-K filed: 2026-04-13 SEC page: https://www.sec.gov/edgar/browse/?CIK=771266 Filing source: https://www.sec.gov/Archives/edgar/data/771266/000149315226016338/form10-k.htm ## At a glance FY2025 · period end 2025-12-27 · filed 2026-04-13 · accession 0001493152-26-016338 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000771266.json | Metric | Value | FY | Provenance | | --- | ---: | ---: | --- | | Revenue | 39,323,731 USD | 2025 | verified | | Net income | 2,606,549 USD | 2025 | verified | | Assets | 108,394,257 USD | 2025 | verified | | Free cash flow | -16,975,825 USD | 2025 | computed | | Net margin | 6.63% | 2025 | computed | | Operating margin | -25.06% | 2025 | computed | | Revenue YoY | -21.88% | 2025 | computed | | ROE | 4.07% | 2025 | computed | Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity. No market price, no rating, no forecast on this site. Not investment advice. ### Peer percentile fingerprint | Ratio | KOPN | Peer median | Percentile | N | | --- | ---: | ---: | ---: | ---: | | Net margin | 6.6% | 4.9% | 55 | 59 | | Operating margin | -25.1% | 3.7% | 14 | 58 | | Revenue growth | -21.9% | 15.5% | 3 | 61 | | FCF margin | -43.2% | 8.9% | 7 | 60 | | ROE | 4.1% | 3.8% | 51 | 58 | | ROA | 2.4% | 1.6% | 52 | 61 | | Liabilities / equity | 0.57 | 0.51 | 55 | 59 | | Current ratio | 2.70 | 2.70 | 50 | 61 | Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 3674 Semiconductors & Related Devices, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking. ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 39323731 | USD | 2025 | 2026-04-13 | | Net income | 2606549 | USD | 2025 | 2026-04-13 | | Assets | 108394257 | USD | 2025 | 2026-04-13 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000771266.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | | | | | 24,465,005 | 29,518,809 | 40,127,669 | 45,666,117 | 47,401,190 | 40,394,177 | 50,335,167 | 39,323,731 | | Net income | | | | | -23,568,717 | -25,240,482 | -34,533,542 | -29,506,252 | -4,411,112 | -13,432,873 | -19,325,917 | -19,748,219 | -43,877,896 | 2,606,549 | | Operating income | | | | | -20,472,617 | -30,297,973 | -39,966,727 | -26,379,662 | -4,763,418 | -13,775,036 | -21,790,213 | -17,177,504 | -43,108,826 | -9,854,135 | | Diluted EPS | -0.29 | -0.08 | -0.45 | -0.23 | -0.37 | | | | | -0.15 | -0.21 | -0.18 | -0.33 | 0.01 | | Operating cash flow | | | | | -26,174,695 | -25,912,698 | -28,103,782 | -21,026,854 | -4,417,157 | -10,747,782 | -17,687,250 | -15,260,677 | -14,226,605 | -15,538,486 | | Capital expenditures | | | | | 394,897 | 2,794,467 | 1,183,131 | 170,186 | 542,862 | 1,033,503 | 832,712 | 949,487 | 815,299 | 1,437,339 | | Assets | | | | | 87,832,272 | 91,322,490 | 59,549,111 | 43,046,515 | 47,549,147 | 63,007,728 | 43,752,172 | 49,312,316 | 70,765,766 | 108,394,257 | | Liabilities | | | | | | | | | 19,250,552 | 23,380,871 | 19,761,557 | 19,803,421 | 47,484,204 | 36,720,613 | | Stockholders' equity | | | | | 74,077,686 | 76,763,186 | 47,861,874 | 28,608,635 | 28,435,431 | 39,799,191 | 24,163,297 | 29,508,895 | 23,281,562 | 64,117,163 | | Cash and cash equivalents | | | | | 15,822,495 | 24,848,227 | 14,326,347 | 6,029,247 | 17,112,869 | 26,787,931 | 8,258,878 | 5,710,685 | 14,160,120 | 36,400,000 | | Free cash flow | | | | | -26,569,592 | -28,707,165 | -29,286,913 | -21,197,040 | -4,960,019 | -11,781,285 | -18,519,962 | -16,210,164 | -15,041,904 | -16,975,825 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | | | | | | -141.15% | -99.96% | -10.99% | -29.42% | -40.77% | -48.89% | -87.17% | 6.63% | | Operating margin | | | | | | | | -89.37% | -11.87% | -30.16% | -45.97% | -42.52% | -85.64% | -25.06% | | Return on equity | | | | | -31.82% | -32.88% | -72.15% | -103.14% | -15.51% | -33.75% | -79.98% | -66.92% | -188.47% | 4.07% | | Return on assets | | | | | -26.83% | -27.64% | -57.99% | -68.55% | -9.28% | -21.32% | -44.17% | -40.05% | -62.00% | 2.40% | | Liabilities / equity | | | | | | | | | 0.68 | 0.59 | 0.82 | 0.67 | 2.04 | 0.57 | | Current ratio | | | | | 6.24 | 6.59 | 4.77 | 2.99 | 2.34 | 2.98 | 2.13 | 2.51 | 1.43 | 2.70 | ## As-reported value updates 2 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period. Ledger: /company/KOPN/revisions/ ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000771266.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2016-Q3 | 2016-09-24 | | | -0.13 | reported discrete quarter | | 2017-Q1 | 2017-04-01 | | | -0.12 | reported discrete quarter | | 2023-Q2 | 2023-07-01 | | -8,180,379 | -0.07 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 10,598,497 | -2,450,313 | -0.02 | reported discrete quarter | | 2023-Q4 | 2023-12-30 | 8,577,633 | -6,488,972 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-30 | 10,032,641 | -32,548,215 | -0.27 | reported discrete quarter | | 2024-Q2 | 2024-06-29 | 12,336,423 | -5,921,998 | -0.05 | reported discrete quarter | | 2024-Q3 | 2024-09-28 | 13,319,608 | -3,460,342 | -0.03 | reported discrete quarter | | 2024-Q4 | 2024-12-28 | 14,646,495 | -1,947,341 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-29 | 10,538,492 | -3,113,533 | -0.02 | reported discrete quarter | | 2025-Q2 | 2025-03-29 | | -3,113,533 | | reported discrete quarter | | 2025-Q2 | 2025-06-28 | 8,454,883 | | -0.03 | reported discrete quarter | | 2025-Q3 | 2025-06-28 | | -5,166,633 | | reported discrete quarter | | 2025-Q3 | 2025-09-27 | 11,962,425 | | 0.02 | reported discrete quarter | | 2025-Q4 | 2025-12-27 | 8,367,931 | 6,806,111 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-28 | 10,551,370 | -3,752,038 | -0.02 | reported discrete quarter | | 2026-Q2 | 2026-06-27 | 12,734,434 | | 0.00 | reported discrete quarter | ## Filed narrative (10-K & 10-Q) ## Business Verbatim Item 1 Business section from KOPN's latest 10-K: [/company/KOPN/business/](/company/KOPN/business/). ## Risk Factors Verbatim Item 1A Risk Factors from KOPN's latest 10-K: [/company/KOPN/risk-factors/](/company/KOPN/risk-factors/). ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/771266/000149315226037194/form10-q.htm Extracted from Part I Item 2 to the first post-MD&A boundary after HTML sanitization. Confidence: high Filing date: 2026-08-11 Report date: 2026-06-27 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. 27 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 and six months ended June 27, 2026 and June 28, 2025, our revenues by display application, which include product sales and amounts earned from research and development contracts (“R&D”), were as follows: [[GREPCENT_TABLE]] [["","","Three Months Ended","","","Three Months Ended","","","Six Months Ended","","","Six Months Ended"],["(In thousands)","","June 27, 2026","","","June 28, 2025","","","June 27, 2026","","","June 28, 2025"],["Defense","","$","7,311","","","$","6,222","","","$","12,621","","","$","14,683"],["Industrial","","","20","","","","1,031","","","","68","","","","1,423"],["Medical","","","309","","","","213","","","","326","","","","572"],["Consumer and other product","","","0","","","","32","","","","50","","","","50"],["Net product revenues","","","7,640","","","","7,498","","","","13,065","","","","16,728"],["R&D","","","2,168","","","","908","","","","3,459","","","","2,145"],["License and royalties","","","56","","","","49","","","","121","","","","120"],["ASC 606 revenues","","","9,864","","","","8,455","","","","16,645","","","","18,993"],["Grant","","","2,599","","","","\u2014","","","","6,040","","","","\u2014"],["Collaboration","","","271","","","","\u2014","","","","601","","","","\u2014"],["Non ASC 606 revenues","","","2,870","","","","\u2014","","","","6,641","","","","\u2014"],["Total Revenues","","$","12,734","","","$","8,455","","","$","23,286","","","$","18,993"]] [[/GREPCENT_TABLE]] 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 increased in the three months ended June 27, 2026 as compared to the three months ended June 28, 2025, primarily due to higher production volumes of our products for thermal weapon sight applications and liquid crystal displays. The decrease in Defense applications revenues in the six months ended June 27, 2026 as compared to the six months ended June 28, 2025 was primarily related to a decrease in revenue from products used in thermal weapon sights 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 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 in the three and six months ended June 27, 2026 as compared to the three and six months ended June 28, 2025 primarily due to the Company’s progress on the Phase 2 Off-the-Visor Heads-Up Display program with the U.S. Army and due to the start of the development program with Fabric.AI entered into on April 27, 2026 to develop and commercialize certain GPU to GPU connectivity technologies. These contracts typically reimburse us for direct costs and allocated overhead and selling, general and administrative costs and in some cases profit. 28 The slight increase in license and royalty revenue in the three months ended June 27, 2026 as compared to the three months ended June 28, 2025 is due to a increase in royalties earned under IP license agreements for industrial wearable headsets. Grant revenues increased in the three and six months ended June 27, 2026 as compared to the three and six months ended June 28, 2025 in connection with the Company’s government grant, awarded 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 and six months ended June 27, 2026 as compared to the three and six months ended June 28, 2025 as a result of the Company’s strategic partnership, initiated 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 and six months ended June 27, 2026 and June 28, 2025 were as follows: [[GREPCENT_TABLE]] [["","","Three Months Ended","","","Three Months Ended","","","Six Months Ended","","","Six Months Ended"],["(In thousands, except for percentages)","","June 27, 2026","","","June 28, 2025","","","June 27, 2026","","","June 28, 2025"],["Cost of product revenues","","$","6,587","","","$","7,072","","","$","12,197","","","$","14,701"],["Cost of product revenues as a % of net product revenues","","","86","%","","","94","%","","","93","%","","","88","%"]] [[/GREPCENT_TABLE]] The decrease in cost of product revenues as a percentage of net product revenues for the three months ended June 27, 2026, compared to the three months ended June 28, 2025, was primarily attributable to product mix. Cost of product revenues as a percentage of net product revenues increased during the six months ended June 27, 2026 as compared to the six months ended June 28, 2025 primarily attributable to reduced production efficiency during the first three months of 2026. 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 and six months ended June 27, 2026 and June 28, 2025 were as follows: [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A (excerpt) Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/771266/000149315226016338/form10-k.htm Complete FY 2025 MD&A: /company/KOPN/mda/fy2025/ Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Filing date: 2026-04-13 Report date: 2025-12-27 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview The following discussion should be read in conjunction with our consolidated financial statements and notes to those statements and other financial information appearing elsewhere in this Form 10-K. The following discussion contains forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks discussed in “Item 1A- Risk Factors”, and elsewhere in this Form 10-K. Please refer to our cautionary note on Forward-Looking Statements on page 3 of this Form 10-K. We are a leading developer and provider of high-performance application-specific optical solutions consisting of high-resolution microdisplays and optics, microdisplays subassemblies and headsets. We define microdisplays as displays that have a diagonal measurement of less than 2 inches. Our products are used for defense applications (soldier thermal weapon rifle sights, avionic fixed and rotary wing pilot helmets, armored vehicle targeting systems, and training & simulation headsets); industrial and medical headsets; and 3D optical inspection systems. We believe that the technologies we are developing may eventually be used in consumer augmented reality (“AR”) and virtual reality (“VR”) wearable headsets systems. Our products are primarily used to overlay digital information on the real-world scene. Critical Accounting Estimates Management’s discussion and analysis of our financial condition and results of operations are based upon our audited consolidated financial statements. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition under the cost-to-cost measurement method, and investment valuations. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for judgments about the carrying values of assets and liabilities that are not apparent from other sources. Actual results may differ from these estimates under different assumptions. We believe the following critical accounting policies are most affected by our more significant judgments and estimates used in the preparation of our consolidated financial statements: Revenue Recognition Substantially all of our product revenues are derived from the sales of microdisplays, which are sold as individual displays, modules that include electronics and optics, or higher-level subassemblies for use in defense, industrial and consumer near-eye applications such as avionic helmets, thermal weapon sights or virtual reality headsets. We also have development contracts for the design, manufacture and modification of products for the U.S. Government or a prime contractor for the U.S. Government or for a customer that sells into the industrial or 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. Our fixed-price contracts with the U.S. Government or other customers may result in revenue recognized in excess of amounts currently billed. We disclose the excess of revenues over amounts actually billed as Contract assets on the balance sheet. Amounts billed and due from our customers are classified as Accounts receivable on the balance sheets. In some instances, the U.S. Government retains a small portion of the contract price until completion of the contract. The portion of the payments retained until final contract settlement is not considered a significant financing component because the intent is to protect the customer. For contracts with the U.S. Government, we typically receive interim payments either as work progresses, by achieving certain milestones or based on a schedule in the contract. We recognize a liability for these advance payments in excess of revenue recognized and present it as Contract liabilities on the balance sheets. Advanced payment typically is 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 us from the other party failing to adequately complete some or all of its obligations under the contract. For industrial and consumer purchase orders, we typically receive payments within 30 to 60 days of shipment of the product, although for some purchase orders, we may require advanced payment prior to shipment of the product. The Company recognizes revenue from a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. For certain contracts with the U.S. Government, the Company recognizes revenue over time as we deliver goods or perform services 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 subject to liability clauses in the contract that allow the U.S. Government to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. For contracts with commercial customers, while the contract may have a similar liability clause, our products historically have an alternative use and thus, revenue is recognized at a point in time. 28 In situations where control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. We use the cost-to-cost approach to measure the extent of progress towards completion of the performance obligation for our contracts because we believe 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 at completion of the performance obligation. Revenues are recorded proportionally as costs are incurred. Accounting for design, development and production contracts requires judgment relative to assessing risks, estimating contract revenues and costs and making assumptions for schedule and technical issues. Due to the size and nature of the work required to be performed in many of our contracts, the estimation of total revenue and cost at completion is complicated and subject to many variables. Contract costs include material, labor and subcontracting costs, as well as an allocation of indirect costs. We have to make assumptions regarding the number of labor hours required to complete a task, the complexity of the work to be performed, the availability and cost of materials and performance by our subcontractors. For contract change orders, claims or similar items, we apply judgment in estimating the amounts and assessing the potential for realization. These amounts are only included in the contract value when they can be reliably estimated and realization is considered probable. If our estimate of total contract costs or our determination of whether the customer agrees that a milestone achievement is incorrect, our revenue could be overstated or understated and the profits or loss reported could be subject to adjustment. For our commercial customers, the Company’s revenue is recognized when obligations under the terms of a contract with our customer are satisfied and the Company transfers control of the products or perform services, which is upon delivery of the product to the customer or performance of the services. Revenue is recorded as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Provisions for product returns and allowances are reductions in the transaction price and are recorded in the same period as the related revenues. We analyze historical returns, current economic trends and changes in customer demand when evaluating the adequacy of sales returns and other allowances. Certain product sales are made to distributors under agreements allowing for a limited right of return on unsold products. Sales to distributors are primarily made for sales to the distributors’ customers and not for stocking of inventory. Sales, value add and other taxes we collect concurrently with revenue-producing activities are excluded from revenue. The Company also licenses its intellectual property (“IP”) through technology license agreements which provides the customer the right to use our IP as it exists at a point in time. These agreements may include other performance obligations including the sale of products to the customer. The satisfaction of the Company’s performance obligation, and related recognition of revenue, occurs when the IP is delivered to the customer, the license period has begun and there are no additional performance obligations in the agreement. When the license is distinct from other obligations in the agreement, the Company treats the license and other performance obligations as separate performance obligations. Accordingly, the license is recognized at a point in time or over time based on the standalone selling price. Under certain license agreements, we may receive royalties based on the sales of the licensed product. We recognize royalty revenue upon the later of when the related sales occur, or when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Under our current license agreements for which a royalty exists, we have recorded revenue when the related sales by our customer occur because the performance obligation related to the delivery of the license to the customer has been satisfied. Investment Valuation We periodically make equity investments in private companies, accounted for as an equity investment, whose values are difficult to determine. When assessing investments in private companies for impairment, we consider such factors as, among others, the share price from the investee’s latest financing round, the performance of the investee in relation to its own operating targets and its business plan, the investee’s revenue and cost trends, the liquidity and cash position, including its cash burn rate and market acceptance of the investee’s products and services. Because these are private companies that we do not control we may not be able to obtain all of the information we want in order to make a complete assessment of the investment on a timely basis. Accordingly, our estimates may be revised if other information becomes available at a later date. Consolidation, Variable Interest Entities, and Deconsolidation of Kopin Europe We evaluate whether entities in which we hold an ownership or contractual interest should be consolidated in accordance with ASC 810, Consolidation. This evaluation requires significant judgment, including determining whether an entity is a variable interest entity (“VIE”) and, if so, whether we are the primary beneficiary. On October 16, 2025, following a strategic transaction with Theon International Plc (“Theon”), pursuant to which Theon acquired a 49% equity interest in Kopin Europe Ltd. (“Kopin Europe”) and the parties entered into a shareholder agree [Excerpt truncated for page length; the complete text is on the linked full-MD&A page.] Read the full FY 2025 MD&A: /company/KOPN/mda/fy2025/ All MD&A years: /company/KOPN/mda/ ## MD&A history Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page. - [FY 2024 MD&A](/company/KOPN/mda/fy2024/): filed 2025-04-17; accession 0001641172-25-005135 (https://www.sec.gov/Archives/edgar/data/771266/000164117225005135/form10-k.htm) - [FY 2023 MD&A](/company/KOPN/mda/fy2023/): filed 2024-03-14; accession 0001493152-24-009985 (https://www.sec.gov/Archives/edgar/data/771266/000149315224009985/form10-k.htm) - [FY 2022 MD&A](/company/KOPN/mda/fy2022/): filed 2023-03-14; accession 0001493152-23-007614 (https://www.sec.gov/Archives/edgar/data/771266/000149315223007614/form10-k.htm) - [FY 2021 MD&A](/company/KOPN/mda/fy2021/): filed 2022-03-14; accession 0001493152-22-006784 (https://www.sec.gov/Archives/edgar/data/771266/000149315222006784/form10-k.htm) ## Macro cross-references Indicators mapped to this company's SIC classification (industry 3674 Semiconductors & Related Devices) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim. - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/). All macro indicators: /indicators/ ## For LLMs & downloads Markdown twin: /company/KOPN.md · JSON record: /company/KOPN.json · verified financials: /company/KOPN/financials.json / /company/KOPN/financials.csv · machine TOC for the whole site: /llms.txt