Financial Analysis

10. Income Taxes The provision for income taxes from continuing operations consists of the following for the fiscal years indicated: Schedule of Components of Income Tax Expense (Benefit) 2025 2024 Fiscal Year 2025 2024 Current State $ $ Foreign 208,000 170,000 Total current provision 208,000 170,000 Deferred Federal (1,562,000 ) (6,902,000 ) State (407,000 ) (506,000 ) Foreign 1,514,000 (218,000 ) Change in valuation allowance 455,000 7,626,000 Total deferred provision Total provision for income taxes $ 208,000 $ 170,000 The following table sets forth the changes in the Companys balance of unrecognized tax benefits, including interest and penalties, for the year ended: Schedule of Unrecognized Tax Benefit Changes in the unrecognized tax benefits, including interest and penalties, was as follows: Fiscal Year Ended December 27, 2025 December 28, 2024 Beginning balance $ 1,886,000 $ 1,965,000 Additions 208,000 170,000 Foreign exchange increases (decreases) 34,000 (249,000 ) Ending Balance $ 2,128,000 $ 1,886,000 U.S. GAAP requires applying a more likely than not threshold to the recognition and derecognition of uncertain tax positions either taken or expected to be taken on the Companys income tax returns. The total amount of the Companys gross tax liability for tax positions that may not be sustained under a more likely than not threshold, excluding interest and penalties, amounts to $ 0.8 million as of December 27, 2025, and December 28, 2024. The Companys policy regarding th …

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14. 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 Companys 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 miscondu …

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4. Leases The Company enters into operating leases primarily for manufacturing, engineering, research, administration and sales facilities, and information technology (IT) equipment. At December 27, 2025 and December 28, 2024, the Company did not have any finance leases. Almost all of the Companys future lease commitments, and related lease liability, relate to the Companys facility leases. Some of the Companys leases include options to extend or terminate the lease. Schedule of Lease Expense 2025 2024 Operating lease cost $ 853,045 $ 867,920 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) At December 27, 2025 the Companys future lease payments under non-cancellable leases were as follows: Schedule of Future Lease Payment Under Non-cancellable Lease 2026 $ 732,610 2027 669,255 2028 201,333 2029 2030 Thereafter Total future lease payments 1,603,198 Less effects of discounting (123,222 ) Total $ 1,479,976 Cash paid for operating cash flows from operating leases: Schedule of Operating Cash Flows From Operating Leases 2025 2024 Cash paid for amounts included in the measurement of operating lease liabilities $ 865,699 $ 861,775 Other information related to leases was as follows: 2025 2024 Weighted Average Discount RateOperating Leases 6.80 % 6.77 % Weighted Average Remaining Lease TermOperating Leases (in years) 2.23 3.16 …

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Recently Issued Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, Income StatementReporting Comprehensive IncomeExpense 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, IntangiblesGoodwill and OtherInternal-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 evalua …

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16. 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 Companys 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 Companys investments in RealWear. As of December 27, 2025, 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 December 27, 2025. On October 16, 2025, Theon International Plc (Theon) became a related party of the Company following its equity investment in Kopin Europe Limited (Kopin Europe), the Companys 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 …

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15. 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 Companys 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. Significant segment expenses are included in the accompanying Consolidated Financial Statements. See the Consolidated Statements of Operations for the fiscal years ended 2025 and 2024. Total long-lived assets by country at December 27, 2025 and December 28, 2024 were: Schedule of Long-lived Assets by Geographic Areas Total Long-lived Assets (in thousands) 2025 2024 U.S. $ 4,105 $ 4,153 United Kingdom - 82 Total $ 4,105 $ 4,235 The Company disaggregates …

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1. Summary of Significant Accounting Policies The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. As used in these notes, the terms we, us, our, Kopin and the Company mean Kopin Corporation and its consolidated subsidiaries, unless the context indicates another meaning. Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The accompanying consolidated financial statements reflect the operations of Kopin Corporation and its consolidated subsidiaries. Fiscal Year The Companys fiscal year ends on the last Saturday in December. The fiscal years ended December 27, 2025, December 28, 2024, and December 30, 2023, include 52 weeks, and are referred to as fiscal years 2025 and 2024, respectively, herein. Principles of Consolidation The consolidated financial statements include the accounts of Kopin Corporation and its consolidated subsidiaries. As of October 16, 2025, the Company no longer has a controlling financial interes …

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