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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
DC 20549

 FORM

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

 For
the fiscal year ended December 30, 2023

 OR

 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

 (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.)

 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

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

 None.

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

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 such filing requirements for the past 90 days. Yes No

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

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 definitions of "large accelerated filer," "accelerated filer," "smaller
reporting company," and emerging growth company in Rule 12b-2 of the Exchange Act. (Check one):

 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.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

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

 As
of July 1, 2023 (the last business day of the registrant's most recent second fiscal quarter), the aggregate market value of outstanding
shares of voting stock held by non-affiliates of the registrant was $ 225,359,485.

 As
of March 7, 2024, 118,428,003 shares of the registrant's Common Stock, par value $.01 per share, were issued and outstanding.

 DOCUMENTS
INCORPORATED BY REFERENCE

 Portions
of the definitive proxy statement relating to the registrant's annual meeting of stockholders are incorporated by reference in
response to Items 10, 11, 12, 13 and 14 of Part III of this Form 10-K.

 Item
 1.

 Business

 Item
 1A.

 Risk Factors

 Item
 1B.

 Unresolved Staff Comments

 Item
 1C.

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal Proceedings

 Item
 4.

 Mine Safety Disclosures

 Item
 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 Reserved

 Item
 7.

 Management's Discussion and Analysis

 Item
 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item
 8.

 Financial Statements and Supplementary Data

 Item
 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A.

 Controls and Procedures

 Item
 9B.

 Other Information

 Item
 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 PART
 III

 Item
 10.

 Directors, Executive Officers and Corporate Governance

 Item
 11.

 Executive Compensation

 Item
 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item
 14.

 Principal Accountant Fees and Services

 Item
 15.

 Exhibits and Financial Statement Schedules

 Item
 16.

 Form 10-K Summary

 SIGNATURES

 Part
I

 Forward
Looking Statements

 This
Annual Report on Form 10-K 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 this Form 10-K. 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 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 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.

 Item
 1.

 Business

 Overview

 Incorporated
in Delaware in 1984, Kopin Corporation ("Kopin" or "the Company") is a leading developer and provider of high-performance
application-specific optical solutions consisting of high-resolution microdisplays and optics, 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 (thermal
weapon rifle sights, 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 headset systems. Our products
are primarily used to overlay digital information on the real-world scene.

 As
part of our plan to focus our resources on new and existing defense, industrial and consumer applications that are in line with our strategic
plan, in January 2023, we conducted a partial spinout of our organic light emitting diode ("OLED") development unit to Lightning
Silicon Technology, Inc. ("Lightning Silicon"). Lightning Silicon received a license under a Technology License agreement
to certain Kopin intellectual property to develop, manufacture and sell OLED display technologies for use in the consumer market, based
on 12 inch deposition technology development. The Technology License agreement provides for Kopin to transfer certain patents to Lightning
Silicon if they achieve certain milestones, however upon transfer Kopin will receive a license to the technology. We received an equity
interest in Lightning Silicon and expect to receive royalties from the sale of products related to the licenses. We retained the ability
and rights to develop, manufacture and sell OLED displays and complete optical solutions that include microdisplays to our core base
in the defense and enterprise markets, as well as value added consumer applications. Lightning Silicon is a company formed by Dr. John
C.C. Fan, our former Chairman of the Board, and former Chief Executive Officer, to develop and supply advanced OLED microdisplays for
the consumer augmented reality and virtual reality markets.

 We
are transitioning from selling just displays to a solution that includes our display, optics, and drive electronics in a subassembly
or a headset for the customer's particular application. Our strategy is to focus on providing our defense, industrial and medical
customers with application-specific optical solutions, which sets us apart from our competition who typically only provide displays.
Our application-specific optical solutions are based on our proprietary microdisplay technologies, which include micro inorganic light
emitting diode ("MicroLED"), OLED, liquid crystal on silicon ("LCOS"), and active-matrix liquid crystal displays
("AMLCDs") and various optics which may be our proprietary designs.

 Our
primary sources of product revenues are from the sale of display and optical components and subassemblies for defense and industrial
applications and development contracts primarily for U.S. defense programs. We believe we also are well-positioned with our technology,
intellectual property, manufacturing capabilities and partnerships and reputation to take advantage of the emerging market for AR and
VR applications and products of which microdisplays are the cornerstone technology. At the center of all our products is a microdisplay.
We are the only company, to our knowledge, that offers AMLCDs, LCOS displays and OLED displays, and related optics, which enable us to
serve the markets and customers based on their needs and the problems they are trying to solve. We are also in development to create MicroLED
displays and displays with additional capabilities such as eye-tracking. We believe our display technologies, combined with our extensive
expertise in optics, system electronics and human factors, are the reason why many customers come to us. In situations where a new market
is developing, or the market already has a number of low-priced display offerings of the size and resolution needed, we may purchase
displays from other display companies for use with our proprietary optics and or headset designs.

 The
components we offer for sale consist of our proprietary miniature or micro AMLCD, LCOS, OLED, MicroLED display technologies, application
specific integrated circuits ("ASICs"), backlights, and optical lenses. We refer to our AMLCD as "CyberDisplay,"
our LCOS displays/Spatial Light Modulators ("SLMs") as "Time Domain Imaging TM technology", and our OLED displays
as "Lightning displays". Our transmissive AMLCDs are designed in Westborough, Massachusetts, have initial manufacturing
steps performed in Taiwan and then are completed in our facility in Westborough, Massachusetts.

 Our
AMLCD and OLED displays are sold separately or in subassemblies. For example, we offer a display as a single product, a display module
which includes a display, an optical lens and backlight contained in either plastic or metal housings, a binocular display module which
has two displays, lenses and backlights, and a higher-level assembly which has additional components for defense applications. Examples
of products manufactured by our customers that include our AMLCD and OLED displays include:

 Weapon
 sights and target locators for soldiers to enable faster and more accurate target acquisition;

 Weapon
 sight systems that support artificial intelligence ("AI") based targeting systems in tanks;

 Fighter
 and helicopter pilot helmets that use our display to overlay information (targeting, flight operation, etc.);

 Headsets
 and systems used by soldiers for training and simulation purposes;

 Industrial
 headsets for applications such as field maintenance/service where a service worker can visually access diagrams and drawings in real
 time while keeping both hands free to conduct work or to access a remote expert with live video to help solve a problem remotely
 – thereby increasing productivity and effectiveness;

 Medical
 headsets used by surgeons that include our displays so that the surgeon simply glances down to see the patient or glances up and
 sees a magnified image of the anatomy being worked on; and

 AR
 consumer products for recreational use including rifle sights.

 Our
LCOS products are designed and manufactured at our Forth Dimension Displays ("FDD") subsidiary in Dalgety Bay, Scotland.
Our LCOS displays are often configured with drive electronics and sold as a package that makes it easier for our customers to design
our displays into their end products. A significant portion of the LCOS displays are sold to customers for incorporation into SLMs, which
are built into manufacturing equipment that are used for 3D optical measurement.

 We
are currently developing color and monochrome MicroLED displays and displays with additional capabilities.

 The
AMLCD display driver ASICs we offer are the electronic interfaces between our displays and the products into which the displays are incorporated.
The optical lenses and backlights we offer are based on either our proprietary designs or designs we license from third parties. The
ASICs, optical lenses, and backlights are manufactured by third parties.

 We
design and manufacture defense and industrial head-mounted and hand-held VR products for training and simulation. Our products allow
customers to visualize and interact with simulated 3D environments and equipment for training purposes. Our customers develop high-fidelity
training and simulation applications that require high-performance visuals, intuitive controls, and unsurpassed customer support.

 The
focus of our internally funded research and development activities is on our OLED, MicroLED and other display technologies. Previously
we used internally funded research and development funds to design headset systems that were focused on the emerging industrial and consumer
markets for head-worn, hands-free, voice-and gesture-controlled wireless computing and communication devices. We continue to license
our previously designed systems under agreements that may include a royalty payable to us and a purchase and supply agreement that requires
us to supply our customers and our customers to buy our components for integration into their products. The licenses may convey the right
of exclusivity for a particular market or geographic area.

 In
addition to sales of our components, subassemblies, and headsets, we also derive a significant portion of our revenue from developing
custom product solutions for our customers, which we refer to as Funded Research and Development. We enter into development agreements
with the goal of successfully developing a customer product and then winning the production orders for such products once design is complete
and tested. These development programs can take several years. The Funded Research and Development process typically adds to Kopin's
knowledge base and expertise, putting us in a better position for future business. The Funded Research and Development arrangements typically
have various milestones we are required to achieve to be reimbursed for our efforts. These arrangements are normally fixed price and
may be cancelled by the customer on short notice. We also believe that the technologies developed for the U.S. defense industry can eventually
be used in commercial and enterprise applications and subsequently in consumer applications.

 Sales
to significant non-affiliated customers for fiscal years 2023, 2022 and 2021, as a percentage of total revenues, were as follows:

 Sales as a Percent of Total Revenue

 2023

 2022

 2021

 Customer

 Defense Customers in Total

 %

 %

 %

 DRS Network & Imaging Systems, LLC

 %

 %

 %

 Collins Aerospace

 %

 %

 %

 Funded Research and Development Contracts

 %

 %

 %

 Our
fiscal year ends on the last Saturday in December. The fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021,
are referred to herein as fiscal years 2023, 2022 and 2021, respectively.

 Augmented
and Virtual Reality

 We
believe that defense, industrial, and consumer companies are looking at AR and VR as new applications and computing platforms. For these
markets to develop and grow, advances and investment in display technology, optics, application software, and wireless communications
systems with greater bandwidth such as 5G networks will be necessary. These advances in display technologies must increase performance
but at the same time the cost of displays must decrease.

 Our
Solution

 Kopin
Technology

 Kopin
technology includes the ability to design, and in most cases, manufacture proprietary small form factor AMLCD, LCOS, OLED and MicroLED
displays and optical lenses and the know-how to design and manufacture subassemblies and headsets based on our display technologies.
We also offer proprietary backlights and ASICs that work with our AMLCD displays. Our displays and optics are used in defense applications
(thermal weapon rifle sights, pilot helmets, armored vehicle targeting systems, and training and simulation headsets), industrial applications
(headsets for field service personnel), medical applications (surgeon's headsets), or consumer applications (recreational rifle
scopes). We also offer backlights and ASICs that work with our AMLCD displays. The subassemblies we offer combine one or two of our displays,
backlight, ASIC, complex optics, and other electronics in an assembly that is then included in a larger system (for example a weapon
sight or a targeting system in an armored vehicle). These subassemblies must survive the shock and vibration of weapons fire and operate
in extreme environmental conditions. The headsets we offer combine two of our displays, backlight, ASIC, complex optics, and other electronics
in an assembly that is a stand-alone product that must interface with a larger system. The considerable know-how that goes into the design,
materials selection, assembly, and testing of these subassemblies and headsets is an important part of our technology.

 Display
Products

 Small
form factor displays used in near-eye applications are widely used in defense in many applications such as thermal weapon sights, avionic
helmets and training and simulation systems. Small form factor near-eye displays currently have more limited use in industrial products
such as wearable headsets that allow users to view data, schematics, and videos to enable them to perform production or repairs. In addition,
we believe small form factor near-eye displays are well suited for AR and VR consumer markets and will be a critical component in the
development of these markets, which we believe will grow in the coming years. We believe our small form factor displays have certain
advantages with respect to small size, resolution, brightness, and low power consumption that are advantageous for product design and
usage.

 There
are several microdisplay technologies commercially available including transmissive, reflective, and emissive. Our principal display
products are miniature high-density color or monochrome AMLCDs that range from approximately 428 x 240 resolution to 2048 x 2048 ("2K")
resolution and are sold in either a transmissive or reflective format. We offer emissive OLED displays with a resolution of 1280 x 720
("720p"), 2048 x 2048 2K, 1280 x 960 ("QVGA") and have demonstrated a 2560 x 2560 ("2.6K"). We are
developing emissive Light Emitting Diode ("LED") displays. We sell our displays individually or in combination with our other
components assembled in a subassembly. For example, we offer a display as a product, an industrial subassembly unit that includes one
or two displays, backlight and optics in a plastic housing, and a subassembly for defense applications that we refer to as an HLA ("Higher-Level
Assembly") that contains a display, light emitting diode-based illumination, optics, and electronics in a sealed housing. The defense
subassembly or HLA is designed specifically for the repetitive shock experienced in extreme environments and use.

 Our
transmissive AMLCD products, which we refer to as CyberDisplay products, utilize high-quality, single-crystal-on-silicon, which
is the same high-quality silicon used in conventional integrated circuits. This single-crystal-on-silicon is not grown on glass; rather,
it is first formed on a silicon wafer and patterned into an integrated circuit (including the active matrix, driver circuitry and other
logic circuits) at an integrated circuit foundry. These processes enable the manufacture of miniature active-matrix circuits that are
comparable to higher resolution displays relative to passive and other active matrix displays that are fabricated on glass. Our foundry
partners fabricate integrated circuits using our proprietary backplane designs for our displays in their foundries in Taiwan. The fabricated
wafers are then returned to our facilities, where we lift the integrated circuits off the silicon wafers and transfer them to glass using
our proprietary Wafer Engineering technology. The transferred integrated circuits are then processed, packaged with liquid crystal, and
assembled into display panels at our Westborough, Massachusetts facility. When combined with the appropriate optic, the display provides
the user with a high-resolution, full-screen experience.

 Our
proprietary technology enables the production of transparent circuits on a transparent substrate, in contrast to conventional silicon
circuits, which are on an opaque substrate. Our CyberDisplay products' imaging properties are a result of the inclusion of a liquid
crystal layer between the active-matrix integrated circuit glass and the transparent cover glass. We believe our manufacturing process
offers several advantages over conventional active-matrix LCD manufacturing approaches, including:

 Greater
 miniaturization;

 Higher
 pixel density;

 Lower
 power consumption; and

 Higher
 brightness.

 The
color CyberDisplay products generate colors by using color filters with a white backlight. Color filter technology is a process in which
display pixels are patterned with materials, which selectively absorb or transmit the red, green, or blue colors of light.

 Our
reflective LCOS display products are miniature high-density, dual mode color sequential/monochrome reflective microdisplays with resolutions
that range from approximately 1280 x 768 pixels ("WXGA") resolution to 2K resolution. These displays are manufactured by
our FDD subsidiary in Scotland. Our reflective displays are based on a proprietary, high-speed, ferroelectric liquid crystal on silicon
("FLCOS") platform. Our digital software and logic-based drive electronics combined with the very fast switching binary liquid
crystal, enables our microdisplays to process images purely digitally and create red, green, and blue gray scale in the time domain.
This architecture has major advantages in visual performance over other liquid crystal, organic light-emitting diode, and microelectromechanical
systems-based technologies: precisely controlled full color or monochrome gray scale is achieved on a matrix of undivided high fill factor
pixels, motion artifacts are reduced to an insignificant level, and there are no sub-pixels, no moving mirrors, and no analog conversions
to detract from the quality of the image.

 The
FLCOS device is comprised of two substrates. The first is a pixelated silicon-based complementary metal-oxide semiconductor ("CMOS")
substrate which is manufactured by our foundry partner based on our proprietary backplane design using conventional silicon integrated
circuit lithography processes. The silicon substrate forms the display's backplane, serving as both the active matrix to drive
individual pixels and as a reflective mirror. The second substrate is a front glass plate. Between the backplane and the front glass
substrate is a ferroelectric liquid crystal material which, when switched, enables the incoming illumination to be modulated.

 Our
OLED technology can emit light when electrical current flows through its electroluminescent layers as opposed to our AMLCD which requires
a separate light source. Our OLED microdisplays have a top-emitting structure built on opaque silicon integrated circuits rather than
on glass. An OLED display typically has a wider viewing angle than an AMLCD. Light from an OLED appears evenly distributed in the forward
directions, and so a slight movement of the eye relative to the display does not perceive the change in the image brightness or color.
OLED displays can also have a much higher contrast ratio than AMLCDs, which is desirable for some user applications.

 We
aim to disrupt the OLED microdisplays industry with a new fabless, scalable business model. We believe the partitioning of OLED manufacturing
into multiple parties, each focusing on their core competencies, can make a significant difference in OLED microdisplays performance
and supply chain, while reducing the capital cost and overhead costs of entering this business. Making OLED microdisplays involves three
major steps: designing backplane circuits, processing silicon wafers to generate backplane wafers, and deposition of OLED layers on silicon
backplane wafers and packaging the displays. We believe backplane design is the most intellectual property-intensive area. Kopin has
more than 20 patents granted or pending on the design of OLED backplanes to get low power consumption, high frame rates, and more uniform
display images. Kopin has established relationships with two silicon foundries to produce OLED backplane wafers. We believe Kopin's
Lightning backplane technology and the emergence of high-volume OLED manufacturing facilities can reduce the cost of manufacturing
OLED displays, thereby expanding the applications for OLED microdisplays.

 Our
proprietary technology in OLED microdisplays lies mainly in the design of the integrated circuits or "backplane" upon which
OLED microdisplays are built. The backplane drives the performance of the display.

 We
have engaged foundry services for the fabrication of the Lightning OLED backplane wafers. Our model is to sell these wafers to foundries
that deposit the organic material on the backplane and manufacture the displays. The deposition foundries will either sell the displays
to their customers or to us for resale to our customers. We believe this outsourcing model allows us to leverage our underlying backplane
intellectual property as well as the existing infrastructure to obtain lower cost manufacturing and avail ourselves of manufacturing
technology improvements as they occur.

 Currently
we have several OLED microdisplays including a 2K display with 2048 x 2048 resolution in a 0.99" diagonal size, which are aimed
at VR and Mixed Reality applications; and a 720p display with 1280 x 720 resolution in a 0.49" diagonal size, which is aimed at
AR applications. We have also demonstrated a 2.6K x 2.6K with 2560 x 2560 resolution in a 1.3" diagonal display, which is aimed
at VR applications, and a QVGA display with 1280 x 960 resolution in a 0.5" diagonal size, which is aimed at electronic viewfinder
and AR applications. Our OLED microdisplays have a combo C-PHY/D-PHY Mobile Industry Processor Interface and display stream compression
to allow 120 Hz operation at full resolution. This display is designed for high-end VR and content streaming applications.

 We
offer MicroLED microdisplays which offer the possibility of high brightness, wide viewing angle, excellent contrast, and low cost. Like
our OLED strategy, Kopin's approach is to design the backplane and use foundry partners for the production of the displays. Kopin
is working with potential customers to explore the potential benefits and implementation of the technology. Currently MicroLEDs are expensive
to manufacture, in order to make them commercially viable we expect that high-volume manufacturing process development may be required, including the development of equipment.

 By
offering transmissive, reflective, and emissive microdisplays technologies today and working with potential customers for MicroLEDs in
the future, we believe we can uniquely support whichever technology is best suited for a given application. Transmissive and reflective
AMLCDs are typically used in bright light conditions as their brightness can be modulated over a wide range by controlling the backlight
operation. OLED displays currently have less brightness range but offer superior contrast and response time characteristics and therefore
are better suited in an immersive products environment that blocks out ambient light. MicroLEDs hold the promise of brightness, high
contrast, superior response time and low cost.

 Optical
Lenses and Backlights

 We
offer a variety of optical lenses, some of which we have developed internally and others for which we license the rights to sell. We
also offer a variety of backlights, some of which we have developed internally and some of which are "off-the-shelf" components.
The lenses come in a variety of sizes with the smallest being our Pupil, followed by our Pearl and Pancake lenses.
The different sizes of lenses give us and our customers design flexibility when creating headset systems. There is a trade-off between
the lens size and the size of the perceived image to the viewer. For example, a Pearl lens will provide the viewer with an image
approximately equivalent to what the viewer would see looking directly at a smartphone, whereas a Pancake lens will provide the
viewer with an immersive experience. We use third parties to manufacture these lenses.

 Headset
Systems

 We
license a wireless industrial headset reference design to customers that is a head-worn computer that connects to the Internet wirelessly
and includes an optical pod with one of our display products, a microprocessor, battery, camera, memory, and various commercially available
software packages that we license. We also licensed an industrial headset reference design that attaches to a pair of safety glasses,
includes an optical pod with one of our display products, a camera, is operated primarily using voice and is tethered to an information
source, such as a smartphone, via a wire. The display module or optical pod allows users to view information such as maintenance diagrams
and instruction sets, Internet data, emails, text messages, maps, or other data at a "normal" size because of our specialized
optics. Our industrial headsets provide the capability of viewing technical diagrams, by enabling the user to zoom in to see finer details
or zoom out to see a larger perspective. We are also developing a headset for the medical market.

 Strategy

 Our
product strategy is to enter Funded Research and Development programs with U.S. defense prime contractors to invent, develop, manufacture,
and sell (or license) leading-edge critical technology and microdisplays components and subassemblies that will be used in rugged environments.
We intend to use the know-how gained and technology developed from these defense development programs and products to create products
that can be used in industrial, enterprise, medical and ultimately consumer applications. The products we develop typically include a
microdisplay, optics, and an ASIC in a sealed housing. The products we make for the defense market must be able to withstand the extreme
shock and vibration experienced in weapons fire. Accordingly, our intellectual property includes not just our patented microdisplays
and a broad range of optics but also our know-how to manufacture products that can withstand the shock and vibration of weapons fire
and extreme environments. The critical elements of our strategy include:

 Broad
 Portfolio of Intellectual Property. We believe that our extensive portfolio of patents, trade secrets and non-patented know-how
 provides us with a competitive advantage in our markets and we have been accumulating a significant patent and know-how portfolio
 either by internal efforts or through acquisition. We own, exclusively license, or have the exclusive right to sublicense approximately
 200 patents and patent applications issued and/or pending worldwide. An important piece of our strategy is to continue to accumulate
 valuable patented and non-patented technical know-how relating to our microdisplays, including backplane design, optics and other
 critical technologies for subassemblies and headsets.

 Maintain
 Our Technological Leadership in Defense and Industrial Markets. We are a recognized leader in the design, development, and manufacture
 of high-resolution microdisplay components and subassemblies for defense and industrial applications. We believe our ability to continue
 to develop components and subassemblies for defense applications enhances our opportunity to grow within our other non-defense targeted
 markets such as industrial, medical, and eventually AR and VR consumer markets. We perform research and development contracts for
 U.S. Government agencies and prime contractors of the U.S. Government. Under these contracts, the U.S. Government funds all or a
 portion of our efforts to develop next-generation microdisplays, related technologies and products for aviation systems such as pilot
 helmets, soldier-centric systems such as rifle weapon sights, training and simulation systems and armored vehicles. This enables
 us to supplement our internal research and development budget with additional funding and adds to our expertise in technology, products,
 and systems.

 Understand
 Our Customers' Needs. We believe our system know-how, be it a defense, industrial or consumer system, is a compelling reason
 why customers choose Kopin as their supplier. Unlike many of our competitors who only offer a display, we offer a range of display
 technologies, optics, backlights, and ASICs as either an individual component or in a system. We believe this enables us to provide
 superior technology solutions for our customers' needs. Additionally, our human-factors and system understanding enables us
 to offer our customers valuable engineering services to solve their issues and reduce time to market for their products.

 Internally
 Manufactured Products and Use of Third-Party Manufacturing. We design and manufacture our transmissive and reflective display
 products in facilities that we lease and manage. However, the initial manufacturing steps for fabricating the silicon wafers are
 performed at capital-intensive Taiwan foundries. With OLED displays, which we design the critical backplane, we use silicon wafer
 foundries to produce our electronic wafers based on our backplane designs, and then we use OLED deposition foundries to perform the
 OLED deposition steps on the electronic wafers to produce our displays. The use of these third-party foundries reduces our
 investments in plant and equipment and working capital for new products and enables us to update designs as technology and
 manufacturing trends change.

 Markets
and Customers

 Our
business model is to primarily generate product revenues by selling display components, subassemblies and headsets to customers who offer
defense, industrial, or medical products and to a lesser extent license our system designs and know-how. Eventually we believe our technologies
can generate revenues in the consumer AR and VR markets if we successfully develop differentiated products at an acceptable price point.
We also enter development contracts from customers to either design custom products for them or help them integrate our technology into
their products (Funded Research and Development).

 We
currently sell our display products to our customers in various configurations including but not limited to a single display component,
a subassembly that includes a display, optic, backlight and focus mechanism and electronics, a binocular display subassembly that includes
two displays, lenses, and backlights, and as a subassembly (also known as an HLA) for defense customers. An HLA is like a module but
includes additional components such as an eye cup specific to a defense application and is designed for extreme shock, vibration and
hostile environments.

 We
have sold our AMLCD products to Collins Aerospace, Elbit, and DRS RSTA Inc. for use in defense applications, and to RealWear and Iristik
for industrial wearable products. We have sold our LCOS display products to Saki, Jutze and Mirtec for use in 3D optical inspection equipment.
Our revenues from our OLED and MicroLED displays have primarily been from development contracts with customers that are designing our
displays into their products.

 For
our AMLCD display products to function properly in their intended applications, ASICs and backlights are generally required. Several
companies have designed ASICs to work with our display products and our customers can procure these chip sets directly from the manufacturer
or through us.

 For
fiscal years 2023, 2022 and 2021, sales to defense customers, excluding research and development contracts, as a percentage of total
revenue were 56%, 52% and 40%, respectively. For fiscal year 2023, Collins Aerospace and DRS Network & Imaging Systems LLC accounted
for approximately 27% and 33% of our revenues, respectively.

 For
fiscal years 2023, 2022 and 2021, research and development revenues, primarily from multiple contracts with various prime contractors
of U.S. Government agencies, accounted for approximately 33%, 30% and 32%, respectively, of our total revenues.

 Product
Development

 We
believe that continued introduction of new products in our target markets is essential to our growth. We have assembled a group of highly
skilled engineers who work internally as well as with our customers to continue our product development efforts. Our primary internal
development efforts are focused on AMLCD display subassemblies for defense and industrial applications and OLED display components for
defense, industrial and medical applications. Our customer funded development efforts are primarily focused on MicroLED display development.

 We
have also begun developing software defined backplanes which support Artificial Intelligence focused on solving specific use cases in
the Defense and Consumer markets called our NeuralDisplay product line.

 Component
Products and Subassemblies

 The
pixel size of our current AMLCD transmissive display products ranges from 6.8 to 15 microns. These pixel sizes are much smaller than
a pixel size of approximately 100 microns in a typical laptop computer display. The resolutions of our current commercially available
AMLCD display products are 428 x 240, 640 x 360, 640 x 480, 854 x 480, 800 x 600, 1,280 x 720 and 1,280 x 1,024 and 2048 x 2048 pixels.
The pixel size of our current reflective display products ranges from 8.2 to 13.6 microns. The resolutions of our current commercially
available reflective display products are 1,280 x 768, 1,280 x 1,024, 2,048 x 1,536, and 2,048 x 2,048 pixels.

 Our
AMLCD display product development efforts are primarily focused on improving performance and reducing manufacturing costs. We are continually
evaluating our display manufacturing process to reduce costs. Our defense products include subassemblies, and our defense subassemblies
are referred to as HLAs. The HLA may include a display and multiple optical lenses in a hermetically sealed housing. The HLAs are made
to very exact tolerances, which require Kopin to manage its supply chain to procure raw materials that meet specification while enabling
Kopin to achieve high yields.

 Our
LCOS display product development efforts are also primarily focused on improving performance and reducing manufacturing costs. Our LCOS
displays are offered with resolutions that range from approximately 1280 x 768 pixels ("WXGA") resolution to 2K resolution.

 The
pixel size of our current OLED displays ranges from 7.8 to 9.2 microns with resolutions of 1,280 x 720, 2,048 x 2,048 and 2,560 x 2,560.
We have only recently commenced offering OLED displays and therefore our OLED products are much less mature than our AMLCD products.
Our MicroLED products are still in the development stage.

 We
offer components such as our optical lenses, backlights, and ASICs, manufactured to our specifications, which we then buy and resell.
The components that are made to order rely on either intellectual property we developed or acquired or that we license from third parties.

 Funded
Research and Development

 We
have entered various development contracts with agencies and prime contractors of the U.S. Government and commercial customers. These
contracts help support the continued development of our core technologies. We intend to continue to pursue development contracts for
applications that relate to our defense and commercial product applications. Our contracts contain certain milestones relating to technology
development and may be terminated prior to completion of funding. Our customer funded development projects often lead to a product or
component supply agreement. Our policy is to retain our proprietary rights with respect to the principal commercial applications of our
technology, however, we are not always able to retain our proprietary rights. To the extent technology development has been funded by
a U.S. federal agency, under applicable U.S. federal laws the federal agency that provided the funding has the right to obtain a non-exclusive,
non-transferable, irrevocable, fully paid license to practice or have practiced this technology for governmental use. In addition, we
may be required to negotiate intellectual property rights with our defense prime contractors. For our commercial development agreements,
customers often obtain exclusive rights to a particular display or technology that is developed either permanently or for some period.
Revenues attributable to research and development contracts for fiscal years 2023, 2022 and 2021 totaled $13.5 million, $14.4 million
and $14.7 million, respectively.

 Competition

 Kopin's
strategy is to focus on providing our customers with application specific optical solutions which sets us apart from our competition
who typically only provide displays. We offer display technologies, from our portfolio of display technologies (MicroLED, OLED, LCOS
and AMLCD), with specific optical designs, and drive electronics in a subassembly for the customer's particular application. Typically,
our product offerings provide a digital image which is overlayed on the analog world.

 The
general commercial display market is highly competitive and is currently dominated by large Asian-based electronics companies, including
AUO, BOE Technology Group, Himax, LG Display, Samsung, Sharp, Sony and Texas Instruments. In addition, several companies focus on OLED
microdisplays including BOE Technology Group, Lakeside, MicroOLED, Olightek, Seeya, Seiko Epson and Sony. The display market consists
of multiple segments, each focusing on different end-user applications applying different technologies. Competition in the display field
is based on price and performance characteristics, product quality, size, and the ability to deliver products in a timely fashion. The
success of our display product offerings will also depend upon the adoption of our display products by customers as an alternative to
other active-matrix LCDs or OLEDs and upon our ability to compete against other types of well-established display products and new emerging
display products. Particularly significant is a user's willingness to use a near-eye display device, as opposed to a direct-view
display that may be viewed from several inches to several feet. Assuming a user is willing to use a near-eye display device, companies
such as Apple, Meta, and Samsung are offering near-eye virtual reality headset products that use large display panels on glass to provide
the image as opposed to using microdisplays. Displays on glass typically have lower resolution than our products but are lower in cost
on a per square inch basis. We cannot be certain that we will be able to compete against these companies and technologies, or that consumers
will accept the use of such eyewear in general or our customers' product form factor specifically.

 There
are also several AMLCD, LCOS, OLED, MicroLED and alternative display technologies in development and production. There are many large
and small companies that manufacture or are developing products based on these technologies. We outsource the manufacturing of our OLED
displays to Chinese and European foundries. We expect these foundries to offer their own products. Our display products will compete
with other displays utilizing these and other competing display technologies.

 There
are many companies whose sole business is the development and manufacture of optical lenses, backlights, and ASICs. These companies may
have significantly more intellectual property and experience than we do in the design and development of these components. We do not
manufacture optical lenses, backlights, or ASICs but we either have them made to our specifications or buy standard off-the-shelf products.

 Patents,
Proprietary Rights and Licenses

 An
important part of our product development strategy is to seek, when appropriate, protection for our products and proprietary technology
using various U.S. and foreign patents and contractual arrangements. We intend to prosecute and defend our proprietary technology aggressively.
Many of our U.S. patents and applications have counterpart foreign patents, foreign patent applications or international patent applications
through the Patent Cooperation Treaty.

 Human
Capital Resources

 As
of December 30, 2023, our consolidated business employed 144 individuals. Of these employees, 3 hold Ph. D. degrees in Material Science,
Electrical Engineering or Physics. Our management and professional employees have significant prior experience in semiconductor materials,
device transistor and display processing, optical design, manufacturing, and other related technologies. Our employees are in the U.S.,
Europe and Asia and the laws regarding employee relationships are different by jurisdiction. None of our employees are covered by a collective
bargaining agreement. We have policies to prevent discrimination based on gender, race, ethnicity, nationality, religion, sexual orientation,
gender identity or gender expression. We take affirmative action to ensure that applicants are hired, and that employees are treated
during employment without regard to their race, ethnicity, religion, sex, or national origin. We also take affirmative action to employ
and advance veterans in employment. We consider relations with our employees to be good.

 In
2004, we finalized and adopted a Code of Business Conduct and Ethics regarding the standards of conduct of our directors, officers and
employees. The code is reviewed and updated periodically by our Board of Directors and is available on our website at www.kopin.com.

 Environmental,
Social & Governance (ESG) Initiatives

 We
strive to create and maintain a working environment that fosters honesty and hard work and rewards all of our employees' hard work.
We endeavor to make Kopin Corporation a place people are proud to be associated with. With the growing awareness of environmental and
social issues, we are in the process of creating a more formalized ESG strategy. Our initial process for the strategy creation includes
work by a cross-functional ESG team of leaders representing operations, human resources, supply chain, finance, marketing, and facilities
departments. We also utilize third-party facility, environmental and legal consulting services. These third-party consultants are assisting
us in creating an ESG materiality assessment from which we can develop a baseline assessment for monitoring our progress. Our progress
in creating our ESG strategy and other related activities are reported to the Board of Directors.

 We
provide recurring company-wide communication of our formalized values, a summary of which are:

 Integrity

 Team

 Customers

 Uphold
 Ethical Standards in Our Performance

 Treat
 Everyone with Respect

 Highest
 Quality Customer Service Through Collaborative Success

 Keep
 Our Commitments

 Encourage
 Open Communication

 Provide
 Industry Leading Products

 Protect
 Our Intellectual Property

 Promote
 Critical Thinking and Innovation

 Maintain
 Confidentiality and Protect Customer Intellectual Property

 We
are not a member of the Responsible Business Alliance ("RBA"); however, we have utilized the themes of the RBA Code of Conduct
to supplement our Code of Ethics, including the RBA Code of Conduct's five critical areas of corporate social responsibility: labor,
health and safety, environment, management systems, and ethics. We believe that by following the values noted above and doing our part
in each of these areas, we can achieve our business objectives and long-term stockholder value. For additional information, see "Item
1 – Business: Human Capital Resources" in this Form 10-K.

 We
strive to create a workplace based on the following principles and goals:

 Care
for Our People

We believe in upholding the principles of human rights, worker safety, and observing fair labor practices within our organization.

We respect different viewpoints and perspectives, and ultimately individual thoughts create innovation and achieve better results. We
continually evaluate how we provide organizational training, formalize company values, and revitalize recruitment strategy.

We are committed to employee safety. We have installed safety protocols and monitoring systems. We have periodic audits by third parties
to test our systems and perform preventive maintenance. Our policies prohibit an employee from being alone in our production facilities
or in unsupervised areas of our facilities.

 Environmental
Responsibility

We are committed to protecting the natural environment and our community by complying with all applicable legal and regulatory requirements.
We maintain an environmental management system and a specific framework for implementing relevant sustainable practices.

We ask our employees to help us contribute towards environmental sustainability by looking for opportunities to conserve energy, reduce
consumption of natural resources, preserve air and water quality, manage waste properly, reuse and recycle, and reduce the use of toxic
substances in our operations where possible, including, in particular, in our clean room and lab facilities. Our clean room facility
emissions are less than permitting and reporting thresholds, and we track emissions monthly to verify compliance with the regulations.

We look for ways to reduce energy consumption in our facilities around the world, including upgrades and/or retrofits to smart heating,
ventilation, and air conditioning systems. For instance, we have installed variable speed fans, which only turn on based on various metrics,
thereby reducing energy usage.

 Ethics
& Corporate Responsibility

We are committed to ensuring ethical organizational governance and embracing diversity and inclusion in the board room and throughout
the organization.

We are committed to observing fair, transparent, and accountable operating practices.

We seek to create and foster a healthy, balanced, and ethical work environment for everyone in our organization. To this end, we promote
an ethical organizational culture and encourage all employees to raise questions or concerns about actual or potential ethical issues
and company policies and to offer suggestions about how we can make our organization better. We have a Whistleblower Ethics Hotline that
includes global telephone access and online access. We have an independent third party periodically test the Whistleblower Ethics Hotline.

 Supply
Chain Responsibility

We intend to request that our suppliers adhere to the RBA Code of Conduct or its equivalent by flowing this requirement through our commercial
contracts.

We also adhere to Rule 13p-1 under the Exchange Act and support efforts to avoid sourcing conflict minerals that directly or indirectly
finance or benefit armed groups in the Democratic Republic of Congo and in adjoining countries. Consistent with the Organization for
Economic Co-operation and Development Due Diligence Guidance concerning conflict minerals, we adopted the Conflict-Free Sourcing Initiative
Due Diligence reporting process and seek to obtain conflict minerals content declarations from our suppliers each year, all in an effort
to promote supply chain transparency. We do not directly source tin, tantalum, tungsten, or gold (collectively referred to as 3TG) from
mines, smelters or refiners, and we are in most cases several or more levels removed from these supply chain participants.

 Government
Regulations

 Our
business is subject to extensive regulation in the industries we serve. We deal with numerous U.S. Government agencies and entities,
including but not limited to branches of the Department of Defense ("DoD").

 U.S.
defense contractors are among our largest customers, representing a substantial majority of our total revenues. The U.S. Government may
terminate a contract with us or our customers either "for convenience" (for instance, due to a change in its perceived needs)
or if we default due to our failure or the failure of a general or subcontractor to perform under the contract. If the federal government
terminates a contract with one of our customers, our contract with our customers generally would entitle us to recover only our incurred
or committed costs, settlement expenses and possibly profit on the work completed prior to termination. However, under certain circumstances,
our recovery costs upon termination for convenience of such a contract may be limited. If terminated by the government as a result of
our default, we could be liable for payments made to us for undelivered goods or services, additional costs the government incurs in
acquiring undelivered goods or services from another source, and any other damages it suffers.

 In
addition, we are subject to a variety of federal, state and local governmental regulations including the use, storage, discharge and
disposal of toxic, volatile or otherwise hazardous chemicals used in our manufacturing process. Failure to comply with present or future
regulations could result in fines being imposed on us, suspension of production or cessation of operations. Any failure on our part to
control the use of, or adequately restrict the discharge of hazardous substances, or otherwise comply with environmental regulations,
could subject us to significant future liabilities. We also cannot be certain that past use or disposal of environmentally sensitive
materials in conformity with then existing environmental laws and regulations will protect us from required remediation or other liabilities
under current or future environmental laws or regulations. Certain chemicals we import are subject to regulation by the U.S. Government.
If we or our suppliers do not comply with applicable laws, we could be subject to adverse government actions and may not be able to import
critical supplies.

 We
are also subject to federal International Traffic in Arms Regulations ("ITAR") laws which regulate the protection (cybersecurity)
and export of technical data and export of products to other nations that may use such data or products for defense purposes. Cybersecurity
and data security and protection laws and regulations are evolving and present increasing compliance challenges, which may increase our
costs, affect our competitiveness, cause reputational harm, and expose us to substantial fines or other penalties. Failure to comply
with present or future regulations could result in fines being imposed on us, suspension of production, or a cessation of operations.
Any failure on our part to obtain any required licenses for the export of technical data and/or export of our products, or to otherwise
comply with ITAR, could subject us to significant future liabilities.

 We
are also subject to federal importation laws that regulate the importation of raw materials and equipment from other nations that are
used in our products. Failure to comply with present or future regulations could result in fines being imposed on us, suspension of production,
or a cessation of operations.

 Investments
in Related Businesses

 On
September 30, 2019, we entered into an Asset Purchase Agreement with Solos Technology Limited ("Solos Technology"), pursuant
to which we sold and licensed certain assets of our Solos product line and Whisper Audio ("Whisper") technology. As consideration
for the transaction, we received 1,172,000 common shares representing a 20.0% equity stake in Solos Technology's parent company,
Solos Incorporation ("Solos Inc."). Our 20.0% equity stake will be maintained until Solos Inc. has raised a total of $7.5
million in equity financing after which we will need to participate in future equity offerings, or our ownership percentage will be diluted.

 We
acquired an equity interest in Lenovo New Vision in the first quarter of 2018 for $1.0 million and the contribution of certain intellectual
property. As of December 30, 2023, we own approximately 10% interest in this investment and the carrying value of our investment is $1.5
million.

 We
acquired a right to an equity interest in a medical device company in 2021. As of December 30, 2023, the carrying value of this investment
is $0.3 million.

 As
of December 30, 2023, we own 100% of the outstanding common stock of NVIS, Inc ("NVIS"), FDD, and e-MDT America Inc. ("eMDT")
and we consolidate each of their financial results within our consolidated financial statements.

 We
terminated operations of our subsidiary, Kopin Software Ltd., in the third quarter of 2019 and are in the process of liquidating it.

 On
January 5, 2023, the Company entered into a Technology License Agreement and an Asset Purchase Agreement (the "LST Agreements")
with Lightning Silicon Technology, Inc ("LST"). Pursuant to the LST Agreements, the Company issued a license to LST for certain
technology associated with our Organic Light Emitting Technology, transferred in-process development contracts with two customers and
accounts receivables that the Company had previously determined were not collectible. As consideration for the transaction, the Company
received 18,000,000 common shares representing a 20.0% equity stake in LST. The Technology License agreement provides for Kopin to transfer
certain patents to Lightning Silicon if they achieve certain milestones, however upon transfer Kopin will receive a license to the technology.
The Company will also receive a royalty based on unit sales of products that utilize the technology licensed. Drs. John Fan, the Company's
former President, CEO and Chairman of the Board, Boryeu Tsaur, a former Executive Vice President of the Company and Hong Choi, the Company's
former Chief Technology Officer, terminated their employment with the Company and became investors in and members of the management team
of LST. Dr. Fan is also the founder of LST.

 We
may from time to time make further equity investments in these and other companies engaged in certain aspects of the display, electronics,
optical and software industries as part of our business strategy. In addition, the wearable computing product market is relatively new
and there may be other technologies we need to invest in to enhance our product offering. These investments may not provide us with any
financial return or other benefit, and any losses by these companies or associated losses in our investments may negatively impact our
operating results.

 Sources
and Availability of Raw Materials and Components

 We
rely on third-party independent contractors for certain integrated circuit chip sets, backlights and other critical raw materials such
as special glasses, wafers and chemicals. In addition, our CyberDisplay subassemblies, HLAs, binocular display modules, and other modules
include lenses, backlights, printed circuit boards and other components that we purchase from third-party suppliers. Some of these third-party
contractors and suppliers are small companies with limited financial resources. In addition, our defense customers typically buy a small
number of units, which prevents us from qualifying and buying components economically from multiple vendors. As a result, we are highly
dependent on a select number of third-party contractors and suppliers.

 Availability
of Information

 We
make available free of charge through our website, www.kopin.com, our Annual Reports on Form 10-K and other reports that we file or furnish
with the SEC as soon as reasonably practicable after they are filed or furnished, as well as certain of our corporate governance policies,
including the charters for the Board of Directors' audit, compensation, and nominating and corporate governance committees and
our code of ethics, corporate governance guidelines and whistleblower policy. We will also provide to any person without charge, upon
request, a copy of any of the foregoing materials. Any such request must be made in writing to us, c/o Investor Relations, Kopin Corporation,
125 North Drive, Westborough, MA, 01581.

 Item
 1A.

 Risk
 Factors

 We
operate in a changing global environment that involves numerous known and unknown risks and uncertainties that could materially adversely
affect our financial condition, results of operations, cash flows, and competitive position. Accordingly, our business and financial
results are subject to a number of risks and uncertainties, including those set forth below. Additional risks and uncertainties that
are not currently known to us or that we currently do not believe to be material may also negatively affect our business and financial
results. The risk factors set forth below describe what we believe to be the material risks and uncertainties related to our financial
condition, results of operations, cash flows, and competitive position. We have included the risk factors below without any reflection
on the relative importance of, or likelihood of, any particular risk factor.

 We
have experienced a history of losses, have a significant accumulated deficit, have had negative cash flow from operating activities in
fiscal years 2023, 2022, and 2021, and expect to have negative cash flow from operating activities in fiscal year 2024. Since inception,
we have incurred significant net operating losses. As of December 30, 2023, we had an accumulated deficit of $358.2 million. At December
30, 2023 and December 31, 2022, we had $17.9 million and $12.6 million of cash and cash equivalents, including restricted cash, and marketable
debt securities, respectively. For the years 2023 and 2022, net cash used in operating activities was $15.3 million and $17.7 million,
respectively. The increase in our cash and cash equivalents and marketable securities is primarily due to gross proceeds of $22.9 million
received from the sale of 17,000,000 shares of common stock and the pre-funded warrants to purchase up to 6,000,000 shares of common
stock at a public offering price of $0.99 per share. We plan to continue to invest in research and development even during periods when we are not profitable, which may result in our incurring
losses from operations and negative cash flow. If we do not soon achieve and maintain positive cash flow and profitability, our financial
condition will ultimately be materially and adversely affected, and we will be required to raise additional capital. We may not be able
to raise any necessary capital on commercially reasonable terms or at all. If we fail to achieve or maintain profitability on a quarterly
or annual basis within the timeframe expected by investors, the market price of our common stock may decline.

 Our
products could infringe on the intellectual property rights of others. Companies in the display industry steadfastly pursue and
protect their intellectual property rights. This has resulted in considerable and costly litigation to determine the validity and
enforceability of patents and claims by third parties of infringement of patents or other intellectual property. Our products could
be found to infringe on the intellectual property rights of others. Other companies may hold or obtain patents on inventions or
other proprietary rights in technology necessary for our business. Periodically, companies inquire about our products and technology
in their attempts to assess whether we violate their intellectual property rights. In the event that our products might infringe
upon the patent or other intellectual property rights of others, we may be notified, from time to time, that we could be or we are
infringing certain patents or other intellectual property rights of others. If we are forced to defend against patent or other
intellectual property infringement claims, we may face costly litigation, diversion of technical and management personnel, and
product shipment delays, even if the allegations of infringement are unwarranted. If there are one or more successful claims of
infringement against us and we are unable to develop non-infringing technology or license the infringed or similar technology on a
timely basis, or if we are required to cease the manufacture, use, importation and/or sale of infringing products, expend
significant resources to develop non-infringing technology or obtain licenses to patents of third parties covering the infringing
technology or using one or more of our business or product names due to a successful trademark infringement claim against us, our
business could be adversely affected. We are currently involved in an intellectual property dispute with Blue Radios, Inc., as
described under Item 3. Legal Proceedings. If the outcome of such a dispute is adverse to us, our business could be adversely
affected. We cannot be certain that licenses will be obtainable on acceptable terms, if at all, or that damages for infringement
will not be assessed or that further litigation will not occur. The failure to obtain necessary licenses or other rights or
litigation arising out of any such claims or any adverse decision or ruling relating to such litigation, including the Blue Radios
litigation, could adversely affect our ability to conduct our business or conduct our business as we presently conduct it and as we
plan to conduct it in the future.

 We
may be unable to manufacture our products cost effectively to meet contractual specifications or customer requirements. Our products
are required to meet specifications agreed to in purchase orders and related agreements with our customers. Our ability to produce products
which meet these specifications is dependent on a number of factors including but not limited to our manufacturing processes and our
vendors providing raw materials that meet the specifications we have agreed to with them. In addition, while there may be agreement with
our customers on the specifications there may be ambiguity with the method to measure compliance with meeting the specifications. When
we commence production of new products, we normally go through a period of low production efficiency as we modify our production processes
for higher volume output and train more production employees on how to make the product. Low production efficiency means that the cost
to make the product is more than what we anticipated when we accepted the purchase order from the customer. In addition, after we commence
selling our products customers may request changes to the products which may also result in the low production efficiency starting again.
We currently have several new products and new product configurations going to production. If the products we deliver are found to have
undetected defects or latent defects when we ship them, we may incur the cost to recall the products. Product recalls and product liability
and warranty claims can result in significant damages and costs, including fines, as well as other harm to our business. If we are unable
to manufacture our products cost effectively, our revenue and ability to obtain profitability will be adversely affected.

 Our
revenues and cash flows could be negatively affected if sales of our display products for defense applications significantly decline
or the current defense development programs are either cancelled or ultimately do not result in future product sales. The sale of
our display products to the military for use in thermal weapon sights and avionic helmets has been a primary source of our defense revenues
and cash flows over the last several years. We currently are included in the Family Weapon Sight ("FWS") Individual program
and the Joint Strike Fighter (F-35) jet fighter program. In 2023 we experienced quality issues with the products we supplied for the
FWS-I program. These quality issues resulted in suspension of shipments to our customer at various times during 2023 as we made modifications
to our production processes. We are continuing to make modifications to our production processes as we resolve certain issues. We are
in development and qualification of additional defense programs related to avionic helmets, armored vehicles and soldier rifle scopes.
Our ability to generate revenues and cash flow from sales to the U.S. military and our customers depends on our Display products remaining
qualified in the F-35 Joint Strike Fighter, FWS and other U.S. defense programs, our customers continuing to serve as the suppliers for
those programs, and on the U.S. Government/military funding these programs. We may not be awarded contracts for the systems we are in
qualification for, and for the systems we are qualified for, we may only be awarded a portion of the program as the U.S. military looks
to have multiple sources when possible. Even if our products qualify for these programs, the U.S. Government can opt to change suppliers,
in which case demand for our products could be negatively affected. In addition, the government could postpone or cancel these programs.
We believe the DoD is evaluating alternative display technologies for the F-35 Strike Fighter program and other defense programs, and
we will need to develop and qualify any replacement display technologies. Our ability to generate revenues and cash flow from sales to
the U.S. military also depends on winning contracts over our competitors. If we are unable to be qualified into new U.S. defense programs,
remain qualified in existing programs, or win orders against our competition, or if defense programs are not funded, then our ability
to generate revenues and achieve profitability and positive cash flow will be materially and negatively impacted.

 Our
investments in the development and sale of OLED microdisplays may not be successful, which may materially adversely affect our sales,
profitability and cash flow. Historically, we have sold products that incorporate our proprietary AMLCDs. We believe that for certain
applications OLED microdisplays have performance advantages and we have received future display product needs from some customers that
plan to switch from AMCLDs to OLED microdisplays in the next two to three years. We are in the process of designing and developing OLED
microdisplays and establishing foundry relationships to manufacture them. We expect to make additional monetary investments in their
commercialization, though our plan is to outsource their production. We have little experience in production outsourcing. If we are unsuccessful
in designing and developing OLED microdisplays or if we are unable to find cost-effective third-party production partners, our sales
and profitability may be negatively affected.

 Supply
shortages have and could continue to impair the quality, reduce the availability or increase the cost of raw materials, which could harm
our business. We rely on third-party independent contractors for certain integrated circuit chip sets, backlights, and other critical
raw materials such as special glasses, wafers, and chemicals. Lead times for the parts and components that we order vary significantly
and depend on factors such as manufacturing cycle times, manufacturing yields, and the availability of raw materials used to produce
the parts or components. The semiconductor industry has been and continues to experience a shortage of semiconductor components. We have
experienced intermittent shortages of raw materials, which has affected our ability to manufacture and ship units. These shortages have
also resulted in an increase in the cost of raw materials and semiconductor components. Our products sold for defense applications go
through an expensive and long qualification period before the government will accept the products. Once the product for a defense application
is accepted there are restrictions on our ability to substitute a different raw material or component for the one used in the qualification
of the product. If these shortages were to further affect our supply of raw materials, our ability to manufacture and distribute our
products could continue to be adversely affected, which in turn would adversely affect our results of operations or financial condition.

 Geopolitical
tensions and any conflicts resulting therefrom may negatively affect our ability to source materials and components required to manufacture
our products. We depend principally on a Taiwanese foundry for the fabrication of integrated circuits for our AMLCD defense display
products. We use a Chinese foundry for the deposition process in creating our OLED displays. Our reliance on these foundries involves
several risks, including reduced control over availability, capacity utilization, delivery schedules, manufacturing yields, and costs.
Geopolitical changes in China-Taiwan or China-U.S. relations could disrupt these foundries' operations and cause these risks to
materialize, which would adversely affect our ability to manufacture our display products. If these foundries were to become unable to
provide the required capacity, services or quality on a timely basis due to a military or other form of conflict, geopolitical tensions,
or other reasons relating thereto, we may not be able to manufacture and ship our display products, or we may be forced to manufacture
them in limited quantities until replacement foundry services can be obtained. Furthermore, we cannot assure that we would be able to
establish alternative manufacturing and packaging relationships on acceptable terms or at all.

 We
are in the process of transitioning from using a Chinese deposition foundry to a European foundry for certain OLED products for defense
applications. We depend principally on a Chinese foundry for the deposition process in creating our OLED displays but we are in the
process of having the deposition process performed by a European foundry. If we are unsuccessful in executing our transition plan or
if the transition is significantly delayed, our ability to manufacture and distribute our products could continue to be adversely affected,
which in turn would adversely affect our results of operations or financial condition.

 Most
of our defense sales are on a fixed-price basis, which could subject us to losses if there are cost overruns. Under a fixed-price
contract, we receive only the amount indicated in the contract, regardless of the actual cost to produce the goods. While firm fixed-price
contracts allow us to benefit from potential cost savings, they also expose us to the risk of cost overruns. If the initial estimates
that we use to calculate the sales price and the cost to perform the work prove to be incorrect, we could incur losses. We have had situations
where we have underestimated the cost of a program and incurred losses in fulfilling the contract. As discussed above, we are seeing
a global shortage of semiconductors and other raw materials which is resulting in a significant increase in some raw material prices.
In addition, the U.S. is experiencing inflation levels not seen in many years which is driving higher labor costs. Some of our contracts
have specific provisions relating to cost, scheduling, and performance. If we fail to meet the terms specified in those contracts, then
our cost to perform the work could increase, which would adversely affect our financial position and results of operations. Some of the
contracts we bid on have Indefinite Delivery, Indefinite Quantity ("IDIQ") provisions. This means we are bidding a fixed
price but are not assured of the quantity the government will buy or when it will buy during the term of the contract. This means we
are exposed to the risk of price increases for labor, overhead and raw materials during the term of the contract. We may incur losses
on fixed-price and IDIQ contracts that we had expected to be profitable, or such contracts may be less profitable than expected, which
could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

 The
widespread outbreak of an illness, communicable disease, or any other public health crisis could adversely affect our business, results
of operations and financial condition. We could be negatively affected by the widespread outbreak of an illness, communicable disease,
or any other public health crisis that results in economic and trade disruptions, including the disruption of global supply chains. The
COVID-19 pandemic negatively impacted the economy on a global, national, and local level, disrupted global supply chains, and created
volatility and disruption of financial markets. Responses from governmental authorities and companies to reduce the spread of the pandemic
affected economic activity through various containment measures including, among others, business closures, work stoppages, quarantine
and work-from-home guidelines, limiting capacity at public spaces and events, vaccination requirements, or restrictions of global and
regional travel.

 We
generally do not have long-term contracts with our customers, which makes forecasting our revenues and operating results difficult. We
generally do not enter into long-term agreements with our customers obligating them to purchase our products. Our business is characterized
by short-term purchase orders with shipment schedules within one year, and we generally permit orders to be canceled or rescheduled before
shipment without significant penalty. As a result, our customers may cease purchasing our products at any time, which makes forecasting
our revenues difficult. In addition, due to the absence of a substantial non-cancelable backlog, we typically plan our production and
inventory levels based on internal forecasts of customer demand, which are highly unpredictable and can fluctuate substantially. The
uncertainty of product orders makes it difficult for us to forecast our sales and allocate our resources in a manner consistent with
our actual sales. Moreover, our expense levels and the amounts we invest in capital equipment and new product development costs are based
in part on our expectations of future sales and, if our expectations regarding future sales are inaccurate, we may be unable to reduce
costs in a timely manner to adjust for sales shortfalls, and our results of operations and financial condition could be materially adversely
affected.

 Fluctuations
in operating results make financial forecasting difficult and could adversely affect the price of our common stock. Our quarterly
and annual revenues and operating results may fluctuate significantly for numerous reasons, including:

 The
 timing of the initial selection of our display products as components in our customers' new products;

 Availability
 of interface electronics for our display products;

 Competitive
 pressures on selling prices of our products;

 The
 timing and cancellation of customer orders;

 Our
 ability to introduce new products and technologies on a timely basis;

 Our
 ability to successfully reduce costs;

 The
 cancellation of U.S. Government contracts; and

 Our
 ability to secure agreements from our major customers for the purchase of our products.

 As
a result of these and other factors, investors should not rely on our revenues and our operating results for any one quarter or year
as an indication of our future revenues or operating results. If our quarterly revenues or results of operations fall below the expectations
of investors or public market analysts, the price of our common stock could fall substantially.

 Our
customers who purchase display products for defense applications typically incorporate our products into their products, which are sold
to the U.S. Government under contracts. U.S. Government contracts generally are not fully funded at inception and may be terminated or
modified prior to completion, which could adversely affect our business. Congress funds the vast majority of the federal budget on
an annual basis, and Congress often does not provide agencies with all the money requested in their budget. Many of our customers'
contracts cover multiple years and, as such, are not fully funded at contract award. If Congress or a U.S. Government agency chooses
to spend money on other programs, our customers' contracts may be terminated for convenience. The Anti-Deficiency Act prohibits
involving the government in any obligation to pay money before funds have been appropriated for that purpose, unless otherwise allowed
by law. Therefore, the Anti-Deficiency Act indirectly regulates how agencies award our contracts and pay our invoices. Federal government
contracts generally contain provisions that provide the federal government rights and remedies not typically found in commercial contracts,
including provisions permitting the federal government to, among other things: terminate our existing contracts; modify some of the terms
and conditions in our existing contracts; subject the award to protest or challenge by competitors; suspend work under existing multiple
year contracts and related delivery orders; and claim rights in technologies and systems invented, developed or produced by us.

 The
federal government may terminate a contract with us or our customers either "for convenience" (for instance, due to a change
in its perceived needs) or if we default due to our failure or the failure of a general or subcontractor to perform under the contract.
If the federal government terminates a contract with one of our customers, our contract with our customers generally would entitle us
to recover only our incurred or committed costs, settlement expenses and possibly retain any profit on the work that was completed prior
to termination. However, under certain circumstances, our recovery costs upon termination for convenience of such a contract may be limited.
As is common with government contractors, we have experienced occasional performance issues under some of our contracts. We have received
Stop Work Orders wherein work is suspended pending a review of the program. We may in the future receive show-cause or cure notices under
contracts that, if not addressed to the federal government's satisfaction, could give the government the right to terminate those
contracts for default or to cease procuring our services under those contracts.

 In
addition, U.S. Government contracts and subcontracts typically involve long purchase and payment cycles, competitive bidding, qualification
requirements, delays or changes in funding, extensive specification and performance requirements, price negotiations and milestone requirements.
Each U.S. Government agency often also maintains its own rules and regulations with which we must comply, and which can vary significantly
among agencies.

 We
recognize revenue for some of our defense contracts and some commercial contracts on the over-time method which requires significant
management judgment, and errors in our judgment could result in our revenue being overstated or understated and the profits or loss reported
could be subject to adjustment. For certain contracts with the U.S. Government, we recognize revenue over time as we perform services
or manufacture the goods. The continuous transfer of control to, or performance of services for, 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
and may allow a reasonable profit, and take control of any work in process. Contracts with commercial customers may have a similar liability
clause. In situations where control transfers or services are performed over time, revenue is recognized based on the extent of progress
toward completion of the performance obligation. We generally use the cost-to-cost approach to measure the extent of progress towards
completion of the contractual obligation for our contracts. Under the cost-to-cost measure approach, the extent of progress toward 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 on 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, delivery date and cost of materials and the performance of our subcontractors. Due to the number of significant
factors affecting revenue recognition, forecasting revenue at a point in time in the future is difficult. 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 is achieved is incorrect, our revenue could be overstated
or understated, and the profits or loss reported could be subject to adjustment. If our revenues and costs require adjustment, our stock
price could decline.

 A
decline in the U.S. Government defense budget, changes in spending or budgetary priorities, a prolonged U.S. Government shutdown or delays
in contract awards may significantly and adversely affect our future revenues, cash flow and financial results. In addition to the
Anti-Deficiency Act, in recent years U.S. Government appropriations have been affected by larger U.S. Government budgetary issues and
related legislation. As a result, DoD funding levels have fluctuated and have been difficult to predict. Future spending levels are subject
to a wide range of factors, including Congressional action. In addition, in recent years the U.S. Government has been unable to complete
its budget process before the end of its fiscal year, resulting in both a government shutdown and continuing resolutions to extend sufficient
funds only for U.S. Government agencies to continue operating. Most recently, the federal government was shut down due to a lack of funding
for over one month between late 2018 and early 2019. Additionally, the national debt has recently threatened to reach the statutory debt
ceiling in 2024, and such an event in future years could result in the U.S. Government defaulting on its debts.

 As
a result, defense spending levels are difficult to predict beyond the near term due to numerous factors, including the external threat
environment, future government priorities and the state of government finances. Significant changes in defense spending or changes in
U.S. Government priorities, policies and requirements could have a material adverse effect on our results of operations, financial condition
or liquidity.

 If
we fail to comply with complex procurement laws and regulations, we could lose business and be liable for various penalties or sanctions.
 We must comply with laws and regulations relating to the formation, administration and performance of federal government contracts.
These laws and regulations affect how we conduct business with our federal government customers. In complying with these laws and regulations,
we may incur additional costs, and non-compliance may result in fines and penalties, including contractual damages. Among the more significant
laws and regulations affecting our business are:

 The
 Federal Acquisition Regulation, which comprehensively regulates the formation, administration and performance of federal government
 contracts;

 The
 Truth in Negotiations Act, which requires certification and disclosure of all cost and pricing data in connection with contract negotiations;

 The
 Cost Accounting Standards and Cost Principles, which impose accounting requirements that govern our right to reimbursement under
 certain cost-based federal government contracts; and

 Laws,
 regulations and executive orders restricting the use and dissemination of information classified for national security purposes and
 the export of certain products, services and technical data. We engage in international work falling under the jurisdiction of U.S.
 export control laws. Failure to comply with these control regimes can lead to severe penalties, both civil and criminal, and can
 include debarment from contracting with the U.S. Government.

 Our
contracting agency customers may review our performance under and in compliance with the terms of our federal government contracts. If
a government review or investigation uncovers improper or illegal activities, we may be subject to civil or criminal penalties or administrative
sanctions, including:

 Termination
 of contracts;

 Forfeiture
 of profits;

 Cost
 associated with triggering of price reduction clauses;

 Suspension
 of payments;

 Fines;
 and

 Suspension
 or debarment from doing business with federal government agencies.

 Additionally,
the False Claims Act provides for substantial civil penalties where, for example, a contractor presents a false or fraudulent claim to
the government for payment or approval. Civil actions under the False Claims Act may be brought by the government or by other persons
on behalf of the government (who may then share a portion of any recovery).

 If
we fail to comply with these laws and regulations, we may also suffer harm to our reputation, which could impair our ability to win awards
of contracts in the future or receive renewals of existing contracts. If we are subject to civil or criminal penalties and administrative
sanctions or suffer harm to our reputation, our current business, future prospects, financial condition or operating results could be
materially harmed.

 The
U.S. Government may also revise its procurement practices or adopt new contracting rules and regulations, including cost accounting standards,
at any time. Any new contracting methods could be costly to satisfy, be administratively difficult for us to implement and could impair
our ability to obtain new contracts.

 Our
ability to manufacture and distribute our display products would be severely limited if the foundries that we rely on to manufacture
integrated circuits for our display products fail to provide those services. We depend principally on a Taiwanese foundry for
the fabrication of integrated circuits for our defense display products. In addition, we use a Chinese foundry's services for
OLED deposition and processing of OLED displays. We also use foundries in Korea and France and are evaluating other European
foundries. We have no long-term contracts with the foundries we use and from time to time we have been put on allocation, which
means the foundry will limit or delay the number of wafers they will process for us. If foundries were to terminate or amend their
arrangement with us or become unable to provide the required capacity, services and or quality on a timely basis, we may not be able
to manufacture and ship our display products or we may be forced to manufacture them in limited quantities until replacement foundry
services can be obtained. Furthermore, we cannot assure that we would be able to establish alternative manufacturing and packaging
relationships on acceptable terms.

 Our
reliance on these foundries involves certain risks, including but not limited to:

 Lack
 of control over production capacity and delivery schedules;

 Limited
 control over quality assurance, manufacturing yields and production costs;

 The
 risks associated with international commerce, including unexpected changes in legal and regulatory requirements, changes in tariffs
 and trade policies and political and economic instability; and

 Natural
 disasters such as earthquakes, tsunamis, mudslides, drought, hurricanes and tornadoes.

 Due
to natural disasters such as earthquakes and typhoons that have occasionally occurred in Asia, many Taiwanese companies, including the
Taiwanese foundry we use, have experienced related business interruptions. Our business could suffer significantly if any of the foundries
we use have their operations disrupted for an extended period of time due to natural disasters, political unrest or financial instability.

 We
may be unable to adequately control purchase pricing of certain critical materials, which may materially adversely affect our sales or
profitability. We have no long-term pricing contracts on foundry wafers and certain other materials that represent a significant
portion of our product bill of material costs. We cannot provide assurance against supplier price increases that negatively impact the
cost of producing products, which may adversely affect sales or profitability. Finding and/or qualifying a more cost-effective replacement
supplier may take significant time.

 The
markets in which we operate are highly competitive and rapidly changing and we may be unable to compete successfully. There are a
number of companies that develop or may develop products that compete in our targeted markets. The individual components that we offer
for sale (displays, optical lenses, backlights and ASICs) are also offered by companies whose sole business focuses on that individual
component. For example, there are companies whose sole business is to sell optical lenses. Accordingly, our strategy requires us to develop
technologies and to compete in multiple markets. Some of our competitors are much larger than we are and have significantly greater financial,
development and marketing resources than we do. The competition in these markets could adversely affect our operating results by reducing
the volume of the products we sell or the prices we can charge. These competitors may be able to respond more rapidly than us to new
or emerging technologies or changes in customer requirements. They may also devote greater resources to the development, promotion and
sale of their products than we do.

 Our
success will depend substantially upon our ability to enhance our products and technologies and to develop and introduce, on a timely
and cost-effective basis, new products and features that meet changing customer requirements and incorporate technological enhancements.
If we are unable to develop new products and enhance functionalities or technologies to adapt to these changes, our business will suffer.

 Disruptions
of our production could adversely affect our operating results. If we were to experience any significant disruption in the operation
of our facilities, we would be unable to supply our products to our customers. Many of our sales contracts include financial penalties
for late delivery. In the past, we have experienced power outages at our facilities, which ranged in duration from one to four days.
We have certain critical pieces of equipment necessary to operate our facilities that are no longer offered for sale and we may not have
service contracts or spare parts for the equipment. Additionally, as we introduce new equipment into our manufacturing processes, our
display products could be subject to especially wide variations in manufacturing yields and efficiency. We may experience manufacturing
problems that would result in delays in product introduction and delivery or yield fluctuations.

 A
disruption to our information technology systems could significantly impact our operations, revenue and profitability. Our data processing
systems and our Enterprise Resource Planning ("ERP") software are cloud-based and hosted by third parties. We also use software
packages that are no longer supported by their developer. We have experienced short-term (i.e., a few days) interruptions in our Internet
connectivity. An interruption of the third-party systems or the infrastructure that allows us to connect to the third-party systems for
an extended period may affect our ability to operate our business and process transactions, which could result in a decline in sales
and affect our ability to achieve or maintain profitability.

 Our business and financial performance may be adversely affected by cyber-attacks on information technology infrastructure
and products, as well as changes in cybersecurity and if
our information technology security systems were infiltrated and confidential and/or proprietary information were taken, we could be
subject to fines, lawsuits and loss of customers. Significantly larger organizations with much greater resources than us have been
the victim of cybercrimes. We routinely receive emails probing our Internet security, and our Internet security systems have detected
outside organizations attempting to install Trojan virus software packages in our systems. We rely on our electronic information systems
to perform routine transactions to run our business. We transact business over the Internet with customers, vendors and our subsidiaries
and have implemented security measures to protect against unauthorized access to this information. We have also implemented security
policies that limit access via the Internet from the Company to the outside world based on the individual's position in the Company.
We routinely receive security patches from software providers for the software we use. Our primary concerns are inappropriate access
to personnel information, information covered under the International Traffic in Arms Regulation, product designs and manufacturing information,
financial information and our intellectual property, trade secrets and know-how. Our business may be impacted by disruptions to our own or third-party information technology (IT) infrastructure,
which could result from, among other causes, cyberattacks on or failures of such infrastructure or compromises to its physical security.
Cybersecurity threats are continuously evolving and include, but are not limited to, both attacks on our IT infrastructure and attacks
on the IT infrastructure of our customers, suppliers, subcontractors and other third parties with whom we do business routinely, both
on premises and in the cloud, attempting to gain unauthorized access to our confidential, proprietary, or otherwise protected information,
classified information, or information relating to our employees, customers and other third parties, or to disrupt our systems or the
systems of third parties. We are also exposed to the risk of insider threat attacks. Any such attacks could disrupt our systems or those
of third parties, impact business operations, result in unauthorized release of confidential, proprietary, or otherwise protected information,
and corrupt our data or that of third parties. The threats we face are continuous and evolving and vary in degree of severity and sophistication.
These threats include advanced persistent threats from highly organized adversaries, including but not limited to cyber criminals, nation
states and so-called hacktivists, particularly those adverse to the security interests of the U.S. and its allies, which target us and
other defense contractors. These types of threats are related to the geopolitical environment and have, therefore, grown in number due
to recent geopolitical conflicts. In addition, as a result of the rapid pace of technological change, we and our customers, suppliers,
subcontractors and other third parties with whom we conduct business continue to rely on legacy systems and software, which can be more
vulnerable to cyber threats and attacks. Moreover, we, like other companies, are seeing an unprecedented number of previously unknown
vulnerabilities, for which there are no known mitigations, being revealed by new attacks. Further, the sophistication, availability and
use of artificial intelligence by threat actors present an increased level of risk. Due to the evolving threat landscape, we have experienced
and expect to continue to experience more frequent and increasingly advanced cyber-attacks. In addition, changes in domestic and international
cybersecurity-related laws and regulations have expanded cybersecurity-related compliance requirements, and cybersecurity regulatory enforcement
activity has grown. We expect the regulatory environment to continue to evolve, and staying apace with these regulatory changes could
increase our operational and compliance expenditures and those of our suppliers, and lead to new or additional information technology
and product development expenses. We also face reputational, litigation and financial risks in relation to potential required disclosures
and increased risk of enforcement. We continue to make investments and adopt measures designed to enhance our protection, detection, response,
and recovery capabilities, and to mitigate potential risks to our technology, products, services and operations from potential cybersecurity
threats, as well as to comply with evolving regulations. However, given the unpredictability, nature and scope of cyber-attacks, it is
possible that we are unable to defend against all cyber-attacks, that potential vulnerabilities could go undetected and persist in the
environment for an extended period, or that we may otherwise be unable to mitigate customer losses and other potential consequences of
these attacks. In some cases, we must rely on the safeguards put in place by our customers, suppliers, subcontractors and other third
parties to protect against and report cyber threats and attacks. We could potentially be subject to production downtimes, operational
delays, other detrimental impacts on our operations or ability to provide products and services to our customers, the compromise of confidential
information, intellectual property or otherwise protected information, misappropriation, destruction or corruption of data, security breaches,
other manipulation or improper use of our or third-party systems, networks or products, financial losses from remedial actions, loss of
business, or potential liability, penalties, fines and/or damage to our reputation. Any of these could have a material adverse effect
on our competitive position, results of operations, financial condition or liquidity. Due to the evolving nature of such risks, the impact
of any potential incident cannot be predicted.

 We
may not achieve some or all of the anticipated benefits of our equity investments. At December 30, 2023, we had equity investments
in companies totaling $4.7 million, where we have limited, if any, control over their governance, financial reporting and operations.
As a result, we face certain operating, financial and other risks relating to these investments, including risks related to the financial
strength of the investments. We are required to periodically review the value of these investments for impairment. For example, in the
second quarter of 2023, we reviewed the financial condition and other factors of our investment in a customer and as a result, we recorded
an impairment charge of $3.1 million to reduce the carrying value of our investment. These investments may not contribute to our earnings
or cash flows. In addition, these investments may be required to raise additional capital, which may result in our ownership percentage
being decreased.

 If
we are unable to obtain or maintain existing software license relationships or other relationships relating to the intellectual property
we use, our ability to grow revenue and achieve profitability and positive cash flow may be negatively affected. Our headset systems
include software that we license from other companies. Should we violate the terms of a license, our license could be canceled. Companies
may decide to stop supporting the software we license, or new versions of the software may not be compatible with our software, which
would require us to rewrite our software, which we may not be able to do. Moreover, the license fees we pay may be increased, which would
negatively affect our ability to achieve profitability and positive cash flow.

 We
may incur substantial costs in defending our intellectual property and may not be successful in protecting our intellectual property
and proprietary rights. Our success depends in part on our ability to protect our intellectual property and proprietary rights. We
rely on a combination of patents, trademarks, copyrights, trade secrets, nondisclosure agreements, IT security systems, internal controls
and compliance systems, and other measures to protect our intellectual property. We also rely on nondisclosure agreements, confidentiality
obligations in contracts, IT security systems, and other measures to protect certain customer and supplier information and intellectual
property that we have in our possession or to which we have access. We have obtained certain domestic and foreign patents and we intend
to continue to seek patents on our inventions when appropriate. We also attempt to protect our proprietary information with contractual
arrangements and under trade secret laws. Our employees and consultants generally enter into agreements containing provisions with respect
to confidentiality and the assignment of rights to us for inventions made by them while in our employ or consulting for us. These measures
may not adequately protect our intellectual property or proprietary rights. Existing trade secret, trademark and copyright laws afford
only limited protection and our patents could be invalidated, held to be unenforceable or circumvented. Moreover, the laws of certain
foreign countries in which our products are or may be manufactured or sold may not provide full protection of our intellectual property
rights. Misappropriation of our technology and the costs of defending our intellectual property rights from misappropriation could substantially
impair our business. If we are unable to protect our intellectual property or proprietary rights, our business may not be successful,
and the price of our common stock may decline.

 The
process of seeking patent protection can be time consuming and expensive and we cannot be certain that patents will be issued from currently
pending or future patent applications. We cannot be certain that domestic or foreign intellectual property laws will allow the protection
of our intellectual property rights or that others will not independently develop similar products, duplicate our products or design
around any patents issued or licensed to us. We may be subject to or may initiate contested patent or patent application proceedings
in the United States Patent and Trademark Office, foreign patent offices or the courts, which can demand significant financial and management
resources. Patent applications in the U.S. typically are maintained in secrecy until they are published about 18 months after their earliest
claim to priority. As publication of discoveries in the scientific and patent literature lags behind actual discoveries, we cannot be
certain that we were the first to conceive of inventions covered by our pending patent applications or the first to file patent applications
on such inventions. We also cannot be certain that our pending patent applications or those of our licensors will result in issued patents
or that any issued patents will provide adequate protection against a competitor. In addition, we cannot be certain that others will
not obtain patents that we would need to license or could force us to retool or cease manufacturing and sales of products covered by
these patents, nor can we be sure that licenses, if needed, would be available to us on favorable terms, if at all.

 We
also attempt to protect our proprietary information with contractual arrangements and under trade secret laws. We believe that our future
success will depend primarily upon the technical expertise, creative skills and management abilities of our officers and key employees
in addition to patent ownership. Our employees enter into agreements containing provisions with respect to confidentiality and the
assignment of rights to us for inventions made by them while in our employ. Agreements with consultants generally provide that rights
to inventions made by them while consulting for us will be assigned to us unless the assignment of rights is prohibited by the terms
of any of their prior agreements. Agreements with employees, consultants and collaborators contain provisions intended to further protect
the confidentiality of our proprietary information. To date, we have had no experience in enforcing these agreements. We cannot be certain
that these agreements will not be breached or that we would have adequate remedies for any breaches. Our trade secrets may not be secure
from discovery or independent development by competitors, in which case we may not be able to rely on these trade secrets to prevent
our competitors from using them.

 Our
business could suffer if we lose the services of, or fail to attract, key personnel. To continue to provide quality products in our
rapidly changing business, we believe it is important to retain personnel with experience and expertise relevant to our business. Our
success depends in large part upon a number of key management and technical employees. The loss of the services of one or more key employees,
including Mr. Murray, our President and Chief Executive Officer, could seriously impede our success. We do not maintain any "key-man"
insurance policies on Mr. Murray or any other employees. In addition, due to the level of technical and marketing expertise necessary
to support our existing and new customers, our success will depend upon our ability to attract and retain highly skilled management,
technical, and sales and marketing personnel. Competition for highly skilled personnel is intense and there may be only a limited number
of persons with the requisite skills to serve in these positions. Due to the competitive nature of the labor markets in which we operate,
we may be unsuccessful in attracting and retaining these personnel. Our inability to attract and retain key personnel could adversely
affect our ability to develop and manufacture our products.

 If
we fail to keep pace with changing technologies, we may lose customers. Rapidly changing customer requirements and evolving technologies
and industry standards characterize our industries. To achieve our goals, we need to enhance our existing products and develop and market
new products that keep pace with continuing changes in industry standards, requirements and customer preferences. We may be unable to
bring to market technologies and products that are attractive to our customers, and as a result, our business, financial condition and
results of operations may be materially adversely affected.

 Customer
demands and new regulations related to conflict-free minerals may adversely affect us. The Dodd-Frank Wall Street Reform and Consumer
Protection Act (the "Dodd-Frank Act") imposes disclosure requirements regarding the use of "conflict" minerals
mined from the Democratic Republic of Congo and adjoining countries in products, whether or not these products are manufactured by third
parties. These requirements could affect the pricing, sourcing and availability of minerals used in the manufacture of semiconductor
devices (including our products). We have incurred additional costs associated with complying with the disclosure requirements, such
as costs related to determining the source of any conflict minerals used in our products. Our supply chain is complex, and we may be
unable to verify the origins of all metals used in our products. We purchase materials from foreign sources that may not cooperate and
provide us with the necessary information to allow us to comply with the Dodd-Frank Act. This may require us to find alternative sources,
which could delay product shipments. We may also encounter challenges with our customers and stockholders if we are unable to certify
that our products are conflict-free.

in tax laws, an unfavorable resolution of tax examinations, or exposure to additional tax liabilities could have a material adverse effect
on our results of operations, financial condition and liquidity. We are subject to taxes in the U.S., Korea, China and the United
Kingdom. Governments in the jurisdictions in which we operate implement changes to tax laws and regulations periodically. Any implementation
of tax laws that fundamentally changes the taxation of corporations in the U.S. or in the foreign jurisdictions in which we operate could
materially affect our effective tax rate and could have a significant adverse impact on our financial results.

 We
may incur significant liabilities if we fail to comply with stringent environmental laws and regulations and the ITAR, or if we did not
comply with these regulations in the past. We are subject to a variety of federal, state and local government regulations related
to the use, storage, discharge and disposal of toxic or other hazardous chemicals used in our manufacturing process. We are also subject
to federal International Traffic in Arms Regulations (ITAR) laws that regulate the export of technical data and export of products to
other nations that may use these products for defense purposes. Failure to comply with present or future regulations could result in
fines, suspension of production, or a cessation of operations. Any failure on our part to control the use of, or adequately restrict
the discharge of, hazardous substances, or otherwise comply with environmental regulations, could subject us to significant future liabilities.
Any failure on our part to obtain any required licenses for the export of technical data and/or export of our products or to otherwise
comply with ITAR, could subject us to significant future liabilities. In addition, we cannot be certain that we have not violated applicable
laws or regulations in the past, which violations could result in required remediation or other liabilities. We also cannot be certain
that past use or disposal of environmentally sensitive materials in conformity with then existing environmental laws and regulations
will protect us from required remediation or other liabilities under current or future environmental laws or regulations.

 We
may be unable to modify our products to meet regulatory or customer requirements. From time to time our display products are subject
to new domestic and international requirements, such as the European Union's Restriction on Hazardous Substances Directive. Our
customers' terms and conditions require us to be in compliance with "all laws." If we are unable to comply with these
regulations, we may not be permitted to ship our products, which would adversely affect our revenue and ability to maintain profitability.
In addition, if we are found to be in violation of laws, we may be subject to fines and penalties.

 We
may be unable to successfully integrate new strategic acquisitions and investments, which could materially adversely affect our business,
results of operations and financial condition. In the past, we have made, and in the future, we may make acquisitions of, and investments
in, businesses, products and technologies that could complement or expand our business. If we identify an acquisition candidate, we may
not be able to successfully integrate the acquired businesses, products or technologies into our existing business and products. Future
acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities,
amortization expenses and write-downs of acquired assets.

 Additionally,
we have several investments where we may have limited, if any, control over their governance, financial reporting, and operations. As
a result, we face certain operating, financial and other risks relating to these investments, including risks related to the financial
strength of the investments. As a result, these investments may not contribute to our earnings or cash flows. In addition, these investments
may be required to raise additional capital, which may result in our ownership percentage being decreased.

in China's laws, legal protections or government policies on foreign investment in China may harm our business. Our business
and corporate transactions are subject to laws and regulations applicable to foreign investment in China as well as laws and regulations
applicable to foreign-invested enterprises. These laws and regulations frequently change, and their interpretation and enforcement involve
uncertainties that could limit the legal protections available to us. Regulations and rules on foreign investments in China impose restrictions
on the means that a foreign investor like us may apply to facilitate corporate transactions we may undertake. In addition, the Chinese
legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all,
that may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after
the violation. If any of our past operations are deemed to be non-compliant with Chinese law, we may be subject to penalties and our
business and operations may be adversely affected. For instance, under the catalogue for the Guidance of Foreign Investment Industries,
some industries are categorized as sectors that are encouraged, restricted or prohibited for foreign investment. As the Catalogue for
the Guidance of Foreign Investment Industries is updated every few years, there can be no assurance that China's government will
not change its policies in a manner that would render part or all of our business to fall within the restricted or prohibited categories.
If we cannot obtain approval from relevant authorities to engage in businesses that have become prohibited or restricted for foreign
investors, we may be forced to sell or restructure such businesses. Furthermore, China's government has broad discretion in dealing
with violations of laws and regulations, including levying fines, revoking business and other licenses and requiring actions necessary
for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a later
time by higher regulatory bodies. If we are forced to adjust our corporate structure or business as a result of changes in government
policy on foreign investment or changes in the interpretation and application of existing or new laws, our business, financial condition,
results of operations and prospects may be harmed. Moreover, uncertainties in the Chinese legal system may impede our ability to enforce
contracts with our business partners, customers and suppliers, or otherwise pursue claims in litigation to recover damages or loss of
property, which could adversely affect our business and operations.

 Raising
additional funds by issuing securities may cause dilution to our existing stockholders or restrict our operations. To the extent
that we raise additional capital by issuing equity securities, the share ownership of existing stockholders will be diluted. The terms
of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether
equity or debt, or the possibility of such issuance, may cause the market price of our shares to decline. We may sell shares or other
securities in other offerings at a price per share that is less than the prices per share paid by other investors, and investors purchasing
shares of our common stock or other securities in the future could have rights superior to existing stockholders. The sale of additional
equity or convertible securities would dilute all of our stockholders and the terms of these securities may include liquidation or other
preferences that adversely affect our existing stockholders.

 We
have no present intention to pay dividends on our common stock in the foreseeable future and, consequently, your only opportunity to
achieve a return on your investment during that time is if the price of our common stock appreciates. Historically, our earnings,
if any, have been retained for the development of our businesses. Any recommendation by our Board of Directors to pay dividends will
depend on many factors, including our financial condition, results of operations, and other factors. Accordingly, if the price of our
common stock declines in the foreseeable future, you will incur a loss on your investment, without the likelihood that this loss will
be offset in part or at all by potential future cash dividends.

 Our
operations are subject to political, legal and economic risks and natural disasters, which could adversely affect our business, results
of operations, financial condition and prospects. Credit rating downgrades in certain European countries and/or speculation regarding
changes to the composition or viability of the EU create uncertain global economic conditions. The ongoing uncertainty could have a negative
economic impact and result in further volatility in the markets for several years. The impact of the Brexit referendum and such ongoing
uncertainty may result in various economic and financial consequences for businesses operating in the UK, the EU and beyond. We hold
significant assets in the UK and operate a UK subsidiary, and the future impacts of Brexit and the continued uncertainty surrounding
the EU could have a material impact on our business, financial condition, results of operations and cash flows.

in government trade policies may increase the cost of our products, which may materially adversely affect our sales or
profitability. We depend on a Taiwanese foundry for the manufacture of integrated circuits for our AMLCD display products and on
Chinese and Korean foundries for our OLED display products. In recent years the U.S. has imposed, among other actions, new or higher
tariffs on specified imported products originating from China in response to what it characterizes as unfair trade practices, and
China has responded by proposing or implementing new or higher tariffs on specified products imported from the U.S. Tariffs on
components that we import from China or other nations that have imposed, or may in the future impose, tariffs have in some cases and
may in the future cause our expenses to increase, which would adversely affect our profitability unless we were able to exclude our
products from the tariffs or we raise prices for our products, which may result in our products becoming less attractive relative to
products offered by our competitors. In addition, future actions or escalations by either the U.S. or China that affect trade
relations may also affect our business or that of our suppliers or customers, and we cannot provide any assurances as to whether
such actions will occur or the form that they may take. Moreover, it is uncertain to what extent, if any, the U.S. tariffs on
components that we import from China will affect the Taiwanese foundries on which we depend, in part because many Taiwanese
foundries conduct parts of their manufacturing in China.

 A
protectionist trade environment in either the U.S. or those foreign countries in which we do business, such as a change in the current
tariff structures, export compliance or other trade policies, may materially adversely affect our ability to sell our products in foreign
markets. To the extent that our sales or profitability are affected negatively by any such tariffs or other trade actions, our business
and results of operations may be materially adversely affected.

 As
a publicly traded company, we are subject to a significant body of regulation, including the Sarbanes-Oxley Act of 2002. While we
have developed and instituted a corporate compliance program based on what we believe are the current best practices in corporate governance
and continue to update this program in response to newly implemented or changing regulatory requirements, we cannot provide assurance
that we are or will be in compliance with all potentially applicable corporate regulations. If we fail to comply with any of these regulations,
we could be subject to a range of regulatory actions, fines or other sanctions or litigation. If we must disclose any material weakness
in our internal control over financial reporting, our stock price could decline.

 Item
 1B.

 Unresolved
 Staff Comments

 None.

 Item
 1C.

 Cybersecurity

 As
a company selling products for defense applications, we may be the target of cyber-attacks from a variety of threat actors. Cybersecurity
threats include attacks on, or other attempts to infiltrate, our information technology (IT) infrastructure and the IT infrastructure
of our customers, suppliers, subcontractors and other third parties, attempting to gain unauthorized access to our confidential or other
proprietary information, classified information, or information relating to our employees, customers, and other third parties, or to
disrupt our systems or the systems of our customers, suppliers, subcontractors, and other third parties. Cybersecurity threats also include
attempts to infiltrate our products or services, including attacks targeting the security, confidentiality, integrity and/or availability
of the hardware, software and information installed, stored or transmitted in our products, including after the purchase of those products
and when they are incorporated into third-party products, facilities, or infrastructure.

 Our
Cybersecurity Program

 Our
products and services are normally classified as EAR 99 by the U.S. government, but our defense customers may ask us to make some alterations
for the environments the products will be used in. Moreover, our products sold for defense applications are integrated with our customers'
products and these customers may provide us with Controlled Unclassified Information (CUI) that requires, safeguarding and dissemination
controls in accordance with laws, regulations, or Government-wide policies. Given the nature of our business and the cybersecurity risks
we face, we have instituted a cybersecurity program for identifying, assessing, and managing cybersecurity risks, which include material
risks from cybersecurity threats to our internal systems, our products, services and programs for customers, and our supply chain.

 Our
enterprise cybersecurity program aligns with the National Institute of Standards and Technology (NIST) standards, among others. The program
includes processes and controls for the deployment of new IT systems by the Company and controls over new and existing system operations.
We, or third parties we contract with, monitor and conduct regular testing of these controls and systems, including vulnerability management
through active discovery and testing to regularly assess patching and configuration status. In addition, we require our employees to
complete annual cybersecurity training, and we regularly conduct simulated phishing and cyber-related communications.

 Incident
Response.

 Our
cybersecurity program includes monitoring for potential security threats that may lead to vulnerabilities. We evaluate and assign severity
levels to incidents, escalate and engage an incident response team based on severity, and manage and mitigate the related risks. Incidents
are reported internally to members of senior management and/or the Board of Directors as appropriate based on severity and incident type
and are also analyzed for external reporting requirements. Our incident response process is also designed to coordinate functions to
enable continuity of essential business operation in the event of a cyber crisis.

 Third
Party Service Providers.

 We
engage third party service providers to expand the capabilities and capacity of our cybersecurity program, including for design, monitoring
and testing of the program's risk prevention and protection measures, and process execution including incident detection, investigation,
analysis and response, eradication, and recovery.

 Program
Assessment.

 We
continuously evaluate and seek to improve and mature our cybersecurity processes. Our cybersecurity program is regularly assessed through
management self-evaluation and ongoing monitoring procedures to evaluate our program effectiveness, including assessments associated
with internal controls over financial reporting as well as vulnerability management through active discovery and testing to validate
patching and configuration. As cybersecurity threats are continuously evolving, we also periodically engage with third parties to perform
maturity assessments of our program to identify potential risk areas and improvement opportunities. This includes assessment of our overall
program, policies and processes, compliance with regulatory requirements and an overall assessment of key vulnerabilities. We use these
assessments to supplement our own evaluation of the overall health of our program and target improvement areas.

 Board
Oversight and Management's Role

 Our
Board of Directors has primary oversight responsibility for enterprise cybersecurity risks. The Audit Committee also considers enterprise
cybersecurity risks in connection with its financial and compliance risk oversight role. The Chief Financial Officer regularly reports
to the Board of Directors on the status of the Company's cybersecurity program and provides the Board with the annual assessment
by a third party on the Company's cybersecurity program. Cybersecurity risks are also included with the Company's annual
business risk assessment which is provided to the Board of Directors.

 For
more information on risks related to cybersecurity, see Item IA. "Risk Factors" of this Form 10-K.

 Item
 2.

 Properties

 We
lease our 74,000 square foot production facility in Westborough, Massachusetts, 10,000 square feet of which is contiguous environmentally
controlled production clean rooms operated between Class 10 and Class 1,000 levels.

 NVIS,
our subsidiary in Reston, Virginia, leases 6,100 square feet in Reston. FDD, our subsidiary in Scotland, leases 20,000 square feet in
Dalgety Bay, 5,000 square feet of which is contiguous environmentally controlled production clean rooms operated between Class 10 and
Class 10,000 levels. FDD also leases an office in Berlin, Germany.

 At
this time, we believe these properties are suitable for our needs for the foreseeable future.

 Item
 3.

 Legal
 Proceedings

 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 our business, financial condition, results
of operations or cash flows could be affected in any particular period.

 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 ("the Court"), alleging that the Company breached a contract between it and BlueRadios concerning an alleged
joint venture between the Company and BlueRadios to design, develop and commercialize 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 alleges 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
October 11, 2016, the Company filed its Answer and Affirmative Defenses. The parties completed expert depositions on November 15, 2019.
On December 2, 2019, the Company filed a Motion for Partial Summary Judgment requesting the Court dismiss counts 2-7 in their entirety
and counts 1 and 8 in part. BlueRadios also filed a Motion for Partial Summary Judgment alleging it is the co-owner of U.S. Patent No.
8,909,296. Responses to the Motions for Partial Summary Judgment were filed on January 15, 2020, and replies were filed on February 19,
2020. On September 25, 2020, the Court denied BlueRadios' Motion for Partial Summary Judgment. On August 3, 2022, the Court granted
the Company's Motion for Partial Summary Judgment by dismissing counts 3, 6, 7, punitive damages under count 2, and count 8 as
it relates to patent applications, and denying the motion as it relates to counts 1, 4, and 5, and the remainder of counts 2 and 8. Additional
factual and expert discovery ordered by The Court has been completed. A trial date has been set by the Court for March 20, 2024. The
Company has not concluded a loss from this matter is probable; therefore, we have not recorded an accrual for litigation or claims related
to this matter for the period ended December 30, 2023. The Company will continue to evaluate information as it becomes known and will
record an estimate for losses at the time or times when it is both probable that a loss has been incurred and the amount of the loss
is reasonably estimable.

 Item
 4.

 Mine
 Safety Disclosures

 Not
applicable.

 Part
II

 Item
 5.

 Market
 for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 Our
common stock is traded on the Nasdaq Capital Market under the symbol "KOPN".

 As
of March 7, 2024, there were approximately 291 shareholders of record of our common stock, which does not reflect those shares held beneficially
or those shares held in "street" name.

 We
have not paid cash dividends in the past, nor do we expect to pay cash dividends for the foreseeable future. We anticipate that earnings,
if any, will be retained for the development of our businesses.

Compensation Plan Information

 The
following table sets forth information as of December 30, 2023 about shares of the Company's common stock issuable upon the exercise
of outstanding options, warrants and rights and available for issuance under our existing equity compensation plans.

 Plan Category

 Number of securities to be issued upon exercise of outstanding options,
warrants and rights (a)

 Weighted-average exercise price of outstanding options, warrants and rights (b)

 Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (b)

 Equity compensation plans approved by security holders

 1,931,767

 $
 1.65

 5, 809,910
 (1)

 Equity compensation plans not approved by security holders

 —

 $
 —

 —

 (1) Amount includes shares available under the 2020 Equity Incentive Plan.

 Company
Stock Performance

 The
following graph shows a five-year comparison of cumulative total shareholder return for the Company, the Nasdaq US Benchmark TR Index
and the S&P 500 Information Technology index. The graph assumes $100 was invested in each of the Company's common stock, the
Nasdaq US Benchmark TR Index and the S&P 500 Information Technology index on December 31, 2017. Data points on the graph are
annual. Note that historical price performance is not necessarily indicative of future performance.

 Item
 6.

 Reserved

 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, bad debts, inventories, warranty
reserves, investment valuations, valuation of stock compensation awards, recoverability of deferred tax assets, liabilities for uncertain
tax positions and contingencies. 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:

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 and unbilled receivables 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
and billings in excess of revenue earned on the balance sheets. The 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.

 To
determine the proper revenue recognition method for contracts with the same customer, we evaluate whether two or more contracts should
be combined and accounted for as one single contract and whether the combined or single contract should be accounted for as more than
one performance obligation. For most of our development contracts and contracts with the U.S. Government, the customer contracts with
us to provide a significant service of integrating a set of components into a single unit. Hence, the entire contract is accounted for
as one performance obligation. Less frequently, however, we may promise to provide distinct goods or services within a contract in which
case we separate the contract into more than one performance obligation. If a contract is separated into more than one performance obligation,
we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling
prices of the promised goods or services underlying each performance obligation. In cases where we sell standard products, the observable
standalone sales are used to determine the standalone selling price.

 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.

 In
situations where control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance
obligation. We generally 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 on 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 performs services, which is generally 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 concurrent 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 product 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 occurs because the performance obligation related to the delivery of the license to the customer
has been satisfied.

 We
provide a reserve for estimated obsolete or unmarketable inventory based on assumptions about future demand and market conditions and
our production plans. Inventories that are obsolete or slow moving are generally fully reserved (representing the estimated net realizable
value) as such information becomes available. Our display products are manufactured based upon production plans whose critical assumptions
include non-binding demand forecasts provided by our customers, lead times for raw materials, lead time for wafer foundries to perform
circuit processing and yields. If a customer were to cancel an order or actual demand was lower than forecasted demand, we may not be
able to sell the excess display inventory and additional reserves would be required. If we were unable to sell the excess inventory,
we would establish reserves to reduce the inventory to its estimated realizable value (generally zero).

 Investment
Valuation

 We
periodically make equity investments in private companies, accounted for as an equity investment, whose values are difficult to determine.
The Company adopted ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets
and Liabilities and the related amendments on December 31, 2017. The Company adopted the measurement alternative for equity investments
without readily determinable fair values (often referred to as cost method investments) on a prospective basis. 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 would 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.

 In
addition to the above, we make investments in government and agency-backed securities and corporate debt securities. For all of our investments,
we provide for an impairment valuation if we believe a decline in the value of an investment is other-than-temporary, which may have
an adverse impact on our results of operations. The determination of whether a decline in value is other-than-temporary requires that
we estimate the cash flows we expect to receive from the security. We use publicly available information such as credit ratings and financial
information of the entity that issued the security in the development of our expectation of the cash flows to be received. Historically,
we have periodically recorded other-than-temporary impairment losses, however we have not done so recently.

Taxes

 We
have historically incurred domestic operating losses from both a financial reporting and tax return standpoint. We establish valuation
allowances to the extent it appears more likely than not that our deferred tax assets will not be realized. These judgments are based
on our projections of taxable income and the amount and timing of our tax operating loss carryforwards and other deferred tax assets.
Given our federal operating tax loss carryforwards, we do not expect to pay domestic federal taxes in the near term. It is possible that
we could pay foreign and state income taxes. We are also subject to foreign taxes from our Korean and U.K. subsidiary operations.

 Our
income tax provision is based on calculations and assumptions that will be subject to examination by tax authorities. Despite our history
of operating losses there can be exposures for state taxes or foreign tax that may be due. We regularly assess the potential outcomes
of these examinations and any future examinations for the current or prior years in determining the adequacy of our provision for income
taxes. Should the actual results differ from our estimates, we would have to adjust the income tax provision in the period in which the
facts that give rise to the revision become known. Such adjustment could have a material impact on our results of operations. We have
historically established valuation allowances against all of our net deferred tax assets because of our history of generating operating
losses and restrictions on the use of certain items. Our evaluation of the recoverability of deferred tax assets has also included an
analysis of the expiration dates of net operating loss carryforwards. In forming our conclusions as to whether the deferred tax assets
are more likely than not to be realized we consider the sources of our income and the projected stability of those sources and product
life cycles.

 Results
of Operations

 We
have two principal sources of revenues: product revenues and research and development ("R&D") revenues. R&D revenues
consist primarily of development contracts with agencies or prime contractors of the U.S. Government and commercial enterprises.

 We
manufacture Active-matrix Liquid Crystal ("AMLCD") transmissive and Liquid Crystal on Silicon ("LCOS") reflective
microdisplays. Our AMLCD display production is being performed entirely in our Westborough, Massachusetts facility. FDD, our wholly-owned
subsidiary, manufactures our LCOS microdisplays in its facility located in Scotland. Our OLED displays are designed by us and manufactured
by third parties for us.

 We
are a display supplier for the U.S. Army's Family of Weapon Sights-Individual and Joint Strike Fighter F-35 programs and are undergoing
qualification for the FWS - Crew Served variant. We are also in development for new display systems for armored vehicles and a medical
headset for surgeons. Our existing and new production programs are expected to increase production for the next several years. There
are other firms offering products which compete against us in the defense programs and all of the programs we supply product to are subject
to the U.S. Government defense budget and procurement process. Accordingly, there can be no assurances we will continue to ship under
our defense contracts.

 Predicting
our R&D revenue and related trends is challenging because we have limited ability to forecast whether we will be awarded additional
R&D contracts in the future as such awards depend on the U.S. military budget and priorities. We cannot assure that the R&D contracts
will result in workable products or if successful our products developed under these contracts will be procured by our customers. If
we do not continue to win R&D contracts or if there is no demand for the products developed under these contracts, our ability to
achieve profitability and positive cash flow could be negatively affected because the R&D revenues (or the products derived from
the R&D contracts) would not be available to cover the allocated overhead and selling, general and administrative costs which may
remain. Some of our contracts are fixed priced and we may incur cost overruns that would result in losses on the contracts. If we incur
such losses on our contracts our ability to achieve profitability and positive cash flow could be negatively affected.

 Because
our fiscal year ends on the last Saturday of December, every seven years we have a fiscal year with 53 weeks. Our fiscal year 2023 was
a 52-week year, 2022 was a 53-week year and 2021 was a 52-week year.

 Revenues.
 Our revenues by display application, which include product sales and amounts earned from research and development contracts, for
fiscal years 2023, 2022 and 2021 by category, were as follows:

 (In thousands)

 2023

 2022

 2021

 Defense

 $
 22,615

 $
 24,780

 $
 18,180

 Industrial/Enterprise

 2,736

 6,136

 9,710

 Consumer

 1,497

 1,871

 Research and Development

 13,455

 14,357

 14,669

 Other

 License and royalties

 1,002

 1,115

 Total Revenues

 $
 40,394

 $
 47,401

 $
 45,666

 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 2023 compared to 2022, primarily due to a decrease in shipments of our products for thermal weapon
sight applications that was partially offset by an increase in sales of our products for defense pilot helmets and training and simulation
programs.

 Industrial/Enterprise
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 Asian contract manufacturers who use the 3D metrology machines for quality control purposes. The decrease in Industrial/Enterprise
applications revenues in 2023 compared to 2022 was primarily due to a decrease in sales to customers who use our display components in
3D metrology equipment and industrial headsets.

 Sales
of our displays for Consumer applications are primarily for use in thermal imaging products, recreational rifle and hand-held scopes.
The decrease in Consumer applications in 2023 compared to 2022 was primarily due to a decrease in sales of our OLED displays for consumer
applications.

 R&D
revenues decreased in 2023 as compared to 2022 primarily due to decreased funding for new display technology development for U.S. defense
programs and OLED display development, which was partially offset by increased funding for armor vehicle targeting system and medical
headset development. These contracts typically reimburse us for direct costs and allocated overhead and selling, general and administrative
costs and in some cases profit. In 2023 and 2022, our R&D revenues exceeded funded R&D expenses by approximately $6.3 million
and $4.1 million, respectively.

 The
increase in license and royalty revenue in 2023 compared to 2022 is due to an increase in royalties earned under IP license agreements
for industrial wearable headsets.

 International
product sales represented approximately 13% and 22% of product revenues for 2023 and 2022, respectively. We categorize our revenues as
either domestic or international based upon the delivery destination of our product. For example, if the customer is located in Asia
or if a U.S. customer has its Asian contract manufacturer order product from us and we deliver the product to Asia, we categorize both
these sales as international. In addition, if we earn royalties on sales from a customer, the royalties are categorized as domestic or
international based on how the product revenues are categorized. Our international sales decreased in 2023 as compared to 2022 due to
a decrease in sales of our products for 3D metrology application by our subsidiary, FDD, our OLED displays for consumer applications
and industrial headset products manufactured overseas. Our international sales are primarily denominated in U.S. dollars. Consequently,
a strengthening of the U.S. dollar could increase the price in local currencies of our products in foreign markets and make our products
relatively more expensive than competitors' products that are denominated in local currencies, which could result in a reduction
in sales or profitability in those foreign markets. As a result, our financial position and results of operations are subject to exchange
rate fluctuation in transactional and functional currency. We have not taken any protective measures against exchange rate fluctuations,
such as purchasing hedging instruments with respect to such fluctuations, because of the historically stable exchange rate between the
Japanese yen, Great Britain pound and the U.S. dollar. Foreign currency translation impact on our results, if material, is described
in further detail under "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" section below.

 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 2022 compared to 2021, primarily due to an increase in shipments of our products into the FWS-
Individual, Joint Strike Fighter and training and simulation programs.

 Industrial/Enterprise
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 Asian contract manufacturers who use the 3D metrology machines for quality control purposes. The decrease in Industrial/Enterprise
applications revenues in 2022 compared to 2021 was primarily due to a decrease in sales to customers who use our display components in
3D metrology equipment and industrial headsets.

 Sales
of our displays for Consumer applications are primarily for use in thermal imaging products, recreational rifle and hand-held scopes.
The decrease in Consumer applications in 2022 compared to 2021 was primarily due to decreased demand for our organic light emitting displays
("OLEDs").

 R&D
revenues decreased in 2022 as compared to 2021 primarily due to reduced funding for new display technology development for U.S. defense
programs, which was partially offset by increased funding for OLED display development. These contracts typically reimburse us for direct
costs and allocated overhead and selling, general and administrative costs and in some cases profit. In 2022 and 2021, our R&D revenues
exceeded funded R&D expenses by approximately $4.1 million and $4.7 million, respectively.

 The
decrease in license and royalty revenue in 2022 compared to 2021 is due to lower royalties earned under IP license agreements for industrial
wearable headsets.

 International
product sales represented approximately 22% and 38% of product revenues for 2022 and 2021, respectively. Our international sales decreased
in 2022 as compared to 2021 due to a decrease in sales of our products for 3D metrology application by our subsidiary, FDD and industrial
headset products manufactured overseas.

 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 fiscal years 2023, 2022 and 2021 were as follows:

 (In thousands, except percentages)

 2023

 2022

 2021

 Cost of product revenues

 $
 24,952

 $
 32,559

 $
 25,052

 Cost of product revenues as a % of net product revenues

 96.2
 %

 %

 83.8
 %

 Cost
of product revenues decreased as a percentage of revenues in 2023 as compared to 2022 primarily due to increased sales of higher margin
products for defense applications in 2023 versus 2022 and lower sales of lower margin products from defense applications in 2023 versus
2022. The Company also implemented several programs and hired additional employees to improve manufacturing quality and efficiencies.

 The
issues associated with the global shortage of semiconductor circuit chips and other raw materials decreased in 2023 as compared to 2022
and 2021. However, we have identified several semiconductor components which continue to have long lead delivery times. We continue to
search for and procure all necessary components from our current vendors and new alternative vendors. In certain situations, we can obtain
the components but at a significantly increased cost. The inability to procure a single component will prevent the completion of our
product and the ability to sell the product. Our products go through extensive qualification processes and therefore our customers may
not accept a replacement component. We are unable to determine if we will be able to obtain all necessary components for fiscal 2024.
If we are unable to obtain all necessary components, we may be required to stop production, which would negatively affect our cash flow
and results of operations.

 Cost
of product revenues increased as a percentage of revenues in 2022 as compared to 2021 primarily due to lower production volumes in the
second and third quarters of fiscal year 2022. In fiscal 2022, we had lower manufacturing efficiencies driven by disruptions to the manufacturing
process caused by intermittent raw material shortages and higher prices for raw materials. Also, in the third quarter of 2022, we incurred
$1.0 million in warranty charges due to quality issues. In the fourth quarter of 2022, gross margins declined due to lower absorption
of costs as we reduced production to make process changes in manufacturing the products.

 Research
and Development. R&D expenses are incurred in support of internal display development programs or 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 allocated overhead. In fiscal year 2023, our Funded
R&D expenditures were primarily related to our display products and defense systems and our Internal R&D was primarily related
to the development of OLED displays. R&D expenses for fiscal years 2023, 2022 and 2021 were as follows:

 (In thousands)

 2023

 2022

 2021

 Funded

 $
 7,177

 $
 10,280

 $
 9,976

 Internal

 3,600

 8,388

 6,312

 Total

 $
 10,777

 $
 18,668

 $
 16,288

 Funded
R&D expense for 2023 decreased as compared to 2022 primarily due to the completion of contracts for defense programs awarded prior
to 2023. Internal R&D expense for 2023 decreased as compared to the prior year primarily due to decreased OLED development.

 Funded
R&D expense for 2022 increased as compared to 2021 primarily due to an increase in the number of defense related contracts we have
been awarded. Internal R&D expense for 2022 increased as compared to the prior year primarily due to increased OLED development.

 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
fiscal years 2023, 2022 and 2021 were as follows:

 (In thousands, except percentages)

 2023

 2022

 2021

 Selling, general and administrative expense

 $
 21,842

 $
 17,965

 $
 18,101

 Selling, general and administrative expense as a % of total revenue

 54.1
 %

 37.9
 %

 39.6
 %

 SG&A
for 2023 increased as compared to 2022 primarily due to an increase of approximately $5.0 million in legal and professional fees and $1.0 million in non-cash stock-based compensation, partially offset by a $1.3
million decrease in compensation and benefits.

 SG&A
for 2022 decreased as compared to 2021 primarily due to a decrease of approximately $2.9 million in non-cash stock-based compensation,
partially offset by a $0.8 million increase in compensation and benefits and $1.4 million of higher professional fees.

 Total
Non-operating (Expense) Income. Non-operating (expense) income is primarily composed of interest income, revaluation and impairment
of equity investments, foreign currency transactions, remeasurement gains and losses incurred by our UK-based subsidiaries and other
non-operating income items. Non-operating (expense) income for the fiscal years 2023, 2022 and 2021 were as follows:

 (In
 thousands)

 2023

 2022

 2021

 Total
 non-operating (expense) income

 $

 (2,415

)

 $

 2,608

 $

 In
2023, we recorded $3.3 million of impairment losses on equity investments. In 2022, we recorded a gain of $4.7 million resulting from
the revaluation of an equity investment. Also in 2022, we recorded a $2.0 million impairment charge on an equity investment. In 2023,
we recorded $0.2 million of foreign currency losses compared to $0.3 million of foreign currency losses recorded in 2022.

 In
2022 we recorded a gain of $4.7 million resulting from the revaluation of an equity investment. In 2022 we recorded a $2.0 million impairment
charge on an equity investment. Also in 2022, we recorded $0.3 million of foreign currency losses compared to $0.1 million of foreign
currency gains recorded in 2021.

 Tax
provision

 (In thousands)

 2023

 2022

 2021

 Tax provision

 $
 (156
)

 $
 (144
)

 $
 (129
)

 The
provision for income taxes for the fiscal years ended 2023 and 2022 of approximately $(0.2) million and $(0.1) million, respectively,
was due to the accretion of additional potential liabilities related to uncertain tax positions and deferred tax liabilities for the
Company's former Korean subsidiary.

 The
provision for income taxes for the fiscal years ended 2022 and 2021 of approximately $(0.1) million was due to the accretion of additional
potential liabilities related to uncertain tax positions and deferred tax liabilities for the Company's former Korean subsidiary.

 Net
loss attributable to noncontrolling interest. In the first quarter of 2023, we acquired the remaining interest in eMDT. Net loss
attributable to noncontrolling interest on our consolidated statement of operations represents the portion of the results of operations
of our majority owned subsidiaries which is allocated to the shareholders of the equity interests not owned by us. The change in net
loss attributable to noncontrolling interest in 2023 compared to 2022 was less than $0.1 million and in 2022 compared to 2021 was less
than $0.1 million and was the result of operations of eMDT.

 Liquidity
and Capital Resources

 At
December 30, 2023 and December 31, 2022, we had cash and cash equivalents, including restricted cash, and marketable securities of $17.9
million and working capital of $24.0 million compared to $12.6 million and $16.4 million, respectively. The change in cash and cash equivalents
and marketable securities was primarily due to gross proceeds of $22.9 million received from the sale of 17,000,000 shares of common
stock and the pre-funded warrants to purchase up to 6,000,000 shares of common stock at a public offering price of $0.99 per share.

 In
the first quarter of fiscal year 2021, we sold 2.4 million shares of common stock for gross proceeds of $16 million (average of $6.66
per share), before deducting broker expenses paid by us of $0.5 million pursuant to the Company's
At-The-Market Equity Offering Sales Agreement dated as of February 8, 2019 (the "Previous ATM Agreement") with Stifel, Nicolaus
& Company, Incorporated, ("Stifel") as agent. In the second quarter of 2021, we sold 0.1 million shares of common
stock for gross proceeds of $0.8 million (average of $6.74 per share), before deducting broker expenses paid by us of $0.1 million under
the Previous ATM Agreement. The Previous ATM Agreement has since terminated pursuant to its terms
as a result of the sale of all the shares subject to such agreement. On March 5, 2021, the Company entered into a new At-The-Market Equity
Offering Sales Agreement (the "Current ATM Agreement") with Stifel under which we may sell up to $50 million of our common
stock. In the third quarter of 2021, we sold 0.6 million shares of common stock for gross proceeds of $4.8 million (average of
$8.06 per share), before deducting broker expenses paid by us of $0.1 million under the Current ATM Agreement.

 In
the second quarter of 2022, we sold 1.5 million shares of common stock and 0.2 million shares of treasury stock for gross proceeds of
$2.1 million (average of $1.26 per share) before deducting broker expenses paid by us of less than $0.1 million and in the third quarter
of 2022, the Company sold 675,000 shares of common stock for gross proceeds of approximately $0.9 million (average of $1.27 per share)
before deducting broker expenses paid by us of less than $0.1 million, pursuant to the Current ATM Agreement. The net proceeds from the
sale of common shares were used for general corporate purposes, including working capital.

 On
January 27, 2023, we sold 17 million shares of registered common stock to certain investors and issued pre-funded warrants to purchase
up to 6,000,000 shares of common stock at a public offering price of $0.99 per pre-funded warrant, which equals the public offering price
per share of the common stock less the $0.01 per share exercise price of each pre-funded warrant. The gross proceeds of these transactions
were $22.9 million, before deducting underwriting discounts and offering expenses paid by us of $1.5 million. At December 30, 2023, we had available $41.4 million for sale of common stock under the Current ATM Agreement.

 In
February 2024, we sold 3.1 million shares of common stock under our Current ATM for gross proceeds of $7.5 million at an average per
share price of $2.42 before deducting underwriting expenses of $0.2 million. Our Current ATM and our shelf registration statement expired
on March 5, 2024. We expect to file a new shelf registration statement and enter into a new ATM in 2024.

 The
following table presents the components of our cash, cash equivalents, restricted cash and marketable debt securities held in U.S. dollars
as of the dates presented:

 Domestic locations

 $
 17,725,979

 $
 11,778,324

 Foreign locations

 95,547

 629,793

 Subtotal cash, cash equivalents, restricted cash and marketable debt securities held in U.S. dollars

 17,821,526

 12,408,117

 Cash and cash equivalents held in other currencies and converted to U.S. dollars

 81,159

 239,539

 Total cash, cash equivalents, restricted cash and marketable debt securities

 $
 17,902,685

 $
 12,647,656

 We
have no plans to repatriate the cash and cash equivalents held in our foreign subsidiary FDD.

 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
have incurred net losses of $19.7 million, $19.3 million and $13.4 million for the fiscal years 2023, 2022 and 2021, respectively, and
net cash outflows from operations of $15.3 million, $17.7 million and $10.7 million for the fiscal years ended 2023, 2022 and 2021, respectively.
Our net cash outflows from operations was partially a result of funding our ongoing investments in research and development which we
believe will continue. We have in the past sold equity securities through an at the market offering and in the traditional fashion of
significant equity offerings. We estimate we will have sufficient liquidity to fund operations at least through the first quarter of
2025. 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.

 Off-Balance
Sheet Arrangements

 We
have no off-balance sheet arrangements.

 Seasonality

 Our
revenues have not followed a seasonal pattern for the past three years and we do not anticipate any seasonal trend to our revenues in
2024.

 Contractual
Obligations

 Under
our former CEO's ("Dr. Fan") employment agreement, commencing in January 2023, Dr. Fan (or in the event of his death
prior to completion of all installments to his surviving spouse, or if none to his estate) would receive $1,500,000 in twenty-four (24)
equal monthly installments. As of December 30, 2023, we owed Dr. Fan $750,000 which will be paid in equal monthly installments during
2024. In addition, under Dr. Fan's employment agreement he receives $40,000 per year through 2033.

 The
following is a summary of our contractual lease payment obligations as of December 30, 2023:

 Payment due by period

 Total

 Less than
 1 year

 1-3 Years

 4-5 years

 More than
 5 years

 Operating Lease Obligations

 $
 2,844,590

 795,884

 1,847,373

 201,333

 —

 Item
 7A.

 Quantitative
 and Qualitative Disclosures About Market Risk

 We
invest our excess cash in high-quality U.S. Government, government-backed (i.e., 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 changes in foreign currency exchange rates primarily through our translation of our foreign subsidiaries' financial
position, results of operations, and transaction gains and losses as a result of non-U.S. dollar-denominated cash flows related to business
activities in Asia and Europe, and remeasurement of U.S. dollars to the functional currency of our U.K. subsidiary. We are also 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 debt securities is
subject to interest rate risk although our intent is to hold securities until maturity. The credit rating of our investments may be affected
by the underlying financial health of the guarantors of our investments. We use silicon wafers in our production processes but do not
enter into forward or futures hedging contracts.

 Item
 8.

 Statements and Supplementary Data

 The
financial statements required by this Item are included in this Report on pages 44 through 72. Reference is made to Item 15 of this Report.

 Item
 9.

 in and Disagreements with Accountants on Accounting and Financial Disclosure

 Not
applicable.

 Item
 9A.

 Controls
 and Procedures

 Evaluation
of Disclosure Controls and Procedures

 In
connection with filing the Form 10-K, management, under the supervision of and with the participation of our Chief Executive Officer
and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of the end of the
period covered by our Annual Report on Form 10-K for the fiscal year ended December 30, 2023. Based upon that evaluation, our CEO and
CFO concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring
that material information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and forms, including ensuring that such material information
is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required
disclosure.

 Management's
Annual Report on Internal Control Over Financial Reporting

 Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act. A company's internal control over financial reporting is a process designed by, or under
the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions,
and effected by the Company's Board of Directors, management, and other personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles and include those policies and procedures that:

 Pertain
 to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
 assets of the company;

 Provide
 reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
 generally accepted accounting principles, and that receipts and expenditures of the company are being made in accordance with authorizations
 of management and directors of the company; and

 Provide
 reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's
 assets that could have a material effect on the financial statements.

 Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

 Under
the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we
conducted an evaluation of our internal control over financial reporting as of December 30, 2023, based on the framework set forth by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013 framework).
Based on that evaluation, our management concluded that, as of December 30, 2023, internal control over financial reporting was effective
based on criteria established in the Internal Control-Integrated Framework issued by the COSO.

in Internal Control Over Financial Reporting

 There
were no changes in our internal control over financial reporting that occurred during the fiscal year ended December 30, 2023 that have
materially affected or are reasonably likely to materially affect our internal control over financial reporting.

 Item
 9B.

 Other
 Information

 None.

 Item
 9C.

 Disclosure
 Regarding Foreign Jurisdictions that Prevent Inspection

 Not
applicable.

 Item
 10.

 Directors,
 Executive Officers and Corporate Governance

 The
information required under this item is incorporated herein by reference to our Proxy Statement relating to our 2024 Annual Meeting of
Stockholders (the "Proxy Statement"). We expect to file the Proxy Statement with the SEC in April 2024 (and, in any event,
no later than 120 days after the close of our last fiscal year).

 Code
of Ethics. We have adopted a Code of Business Conduct and Ethics ("the Code") that applies to all of our employees (including
our CEO and CFO) and directors. The Code is available on our website at www.kopin.com. We intend to satisfy the disclosure requirement
regarding any amendment to or waiver of a provision of the Code applicable to any executive officer or director, by posting such information
on our website.

 Our
corporate governance guidelines, whistleblower policy and the charters of the audit committee, compensation committee, and nominating
and corporate governance committee of the Board of Directors as well as other corporate governance document materials are available on
our website at www.kopin.com under the heading "Investors," then "Governance" then "Governance Documents."

 Item
 11.

 Executive
 Compensation

 The
information required by this item is incorporated herein by reference from the Proxy Statement.

 Item
 12.

 Security
 Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 The
information required by this item is incorporated herein by reference from the Proxy Statement. Refer also to the equity compensation
plan information set forth in Part II Item 5 of this Annual Report on Form 10-K.

 Item
 13.

 Certain
 Relationships and Related Transactions, and Director Independence

 The
information required by this item is incorporated herein by reference from the Proxy Statement.

 Item
 14.

 Principal
 Accounting Fees and Services

 The
information required by this item is incorporated herein by reference from the Proxy Statement.

 Part
IV

 Item
 15.

 Exhibits
 and Financial Statement Schedules

 (1)
 Consolidated Financial Statements:

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 49)

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Comprehensive Loss

 Consolidated Statements of Stockholders' Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 (2)
 Financial Statement Schedules:

Statement Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the accompanying
Consolidated Financial Statements or notes thereto.

 (3)
 Exhibits:

 The
exhibits filed as part of this Form 10-K are listed on the exhibit index immediately preceding such exhibits and is incorporated herein
by reference.

 Report
of Independent Registered Public Accounting Firm

 Stockholders
and the Board of Directors of Kopin Corporation

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of Kopin Corporation and its subsidiaries (the Company) as of December 30,
2023 and December 31, 2022, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash
flows for each of the three years in the period ended December 30, 2023, and the related notes to the consolidated financial statements
(collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Company as of December 30, 2023 and December 31, 2022, and the results of its operations and its cash flows for each
of the three years in the period ended December 30, 2023, in conformity with accounting principles generally accepted in the United States
of America.

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

 Critical
Audit Matters

 The
critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved especially challenging, subjective or complex judgments. The communication of critical audit matters does
not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter
below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

 Research
and Development Revenues

 The
Company's research and development revenues, where control transfers over time and revenue is recognized based on the extent of
progress towards completion of the performance obligation, were $13,454,866 for the year ended December 30, 2023, and are described in
Note 1 of the consolidated financial statements. The Company recognizes revenue for certain of its research and development contracts
over time, generally measuring progress using the input (cost-to-cost) method as costs are incurred. Under the input method, revenue
is recognized based on contract costs expended to date relative to total contract costs expected to be incurred. Management exercises
significant judgment in determining revenue recognition for these customer contracts as the estimate of the total contract costs expected
to be incurred is critical to the recognition of revenue based under the input method.

 We
identified the Company's accounting for revenue recognition of research and development contracts, which are generally accounted
for under the input method, to be a critical audit matter because of the significant assumptions and judgments used by management in
determining the estimated costs expected to be incurred throughout the customer contract. Auditing management's estimation of cost
to be incurred required significant audit effort and a high degree of auditor judgment and subjectivity to evaluate the audit evidence
obtained.

 Our
audit procedures related to the Company's revenue recognition of research and development contracts included the following, among
others:

 Tested
 actual costs incurred, on a sample basis, and the mathematical accuracy of the costs included
 within the Company's input (cost-to-cost) method.

 Selected
 a sample of customer contracts and performed the following procedures:

 –
 Read
 the underlying contracts and agreed the Company's total budgeted costs to approved
 management budgets.

 –
 Evaluated
 management's ability to estimate progress towards completion by performing a review
 of contracts that were completed during the current year or spanned multiple years to determine
 the accuracy and precision of the Company's estimation process.

 –
 Evaluated
 management's ability to achieve the estimates of total profit by performing corroborating
 inquiries with Company personnel, including project managers, and comparing the estimates
 to actual subsequent results.

 /s/
 RSM US LLP

 We
have served as the Company's auditor since 2019.

 Boston, Massachusetts

 March

 KOPIN

BALANCE SHEETS

 ASSETS

 Current assets:

 Cash and cash equivalents

 $
 5,710,685

 $
 8,258,878

 Restricted cash

 500,000

 —

 Marketable debt securities, at fair value

 11,692,000

 4,388,778

 Accounts receivable, net of allowance of $ 1,025,000 and $ 303,000 in 2023 and 2022, respectively

 9,706,036

 6,537,891

 Contract assets and unbilled receivables

 3,409,809

 4,068,364

 7,601,806

 6,426,400

 Prepaid taxes

 85,572

 105,495

 Prepaid expenses and other current assets

 1,124,635

 1,074,867

 Total current assets

 39,830,543

 30,860,673

 Property, plant and equipment, net

 2,163,417

 1,831,641

 Operating lease right-of-use assets

 2,504,909

 3,168,520

 Other assets

 124,925

 170,132

 Equity investments

 4,688,522

 7,721,206

 Total assets

 $
 49,312,316

 $
 43,752,172

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:

 Accounts payable

 $
 7,076,759

 $
 5,438,980

 Accrued payroll and expenses

 1,701,506

 2,879,139

 Accrued warranty

 2,160,000

 1,966,000

 Contract liabilities and billings in excess of revenues earned

 916,826

 930,500

 Operating lease liabilities

 651,503

 786,928

 Accrued post-retirement benefits

 790,000

 790,000

 Other accrued liabilities

 1,702,681

 1,182,346

 Customer deposits

 408,156

 —

 Deferred tax liabilities

 470,884

 482,739

 Total current liabilities

 15,878,315

 14,456,632

 Noncurrent contract liabilities and asset retirement obligations

 278,112

 248,284

 Operating lease liabilities, net of current portion

 1,832,982

 2,576,883

 Accrued post-retirement benefits, net of current portion

 319,996

 1,110,000

 Other long-term liabilities, net of current portion

 1,494,016

 1,369,758

 Total liabilities

 19,803,421

 19,761,557

 Commitments and contingencies (Note 11)

 -

 -

 Stockholders' equity:

 Preferred stock, par value $.01 per share: authorized, 3,000 shares; none issued

 —

 —

 Common stock, par value $.01 per share: authorized, 150,000,000 shares; issued 114,253,818 shares in 2023 and 94,920,060 shares in 2022; outstanding 112,251,416 in 2023 and 92,883,524 in 2022, respectively

 1,123,220

 929,540

 Additional paid-in capital

 385,411,542

 360,567,631

 Treasury stock ( 70,635 shares in 2023 and 2022, at cost)

)

)

 Accumulated other comprehensive income

 1,232,294

 1,176,068

 Accumulated deficit

 ( 358,155,034
)

 ( 338,406,815
)

 Total Kopin Corporation stockholders' equity

 24,163,297

 Noncontrolling interest

 —

)

 Total stockholders' equity

 23,990,615

 Total liabilities and stockholders' equity

 $
 49,312,316

 $
 43,752,172

 See

 KOPIN

STATEMENTS OF OPERATIONS

 Fiscal year ended

 2023

 2022

 2021

 Revenues:

 Net product revenues

 $
 25,937,170

 $
 32,420,397

 $
 29,882,271

 Research and development revenues

 13,454,866

 14,357,222

 14,668,471

 License and other revenues

 1,002,141

 623,571

 1,115,375

 Total revenues

 40,394,177

 47,401,190

 45,666,117

 Expenses:

 Cost of product revenues

 24,952,431

 32,558,748

 25,052,383

 Research and development-funded programs

 7,177,027

 10,279,660

 9,976,103

 Research and development-internal

 3,600,066

 8,387,898

 6,312,148

 Selling, general and administrative

 21,842,157

 17,965,097

 18,100,519

 Total operating expenses

 57,571,681

 69,191,403

 59,441,153

 Loss from operations

 ( 17,177,504
)

 ( 21,790,213
)

 ( 13,775,036
)

 Non-operating (expense) income, net:

 Interest income

 829,602

 76,877

 31,142

 Other income, net

 245,234

 154,357

 265,509

 Foreign currency transaction (losses) gains

 ( 162,204
)

 ( 323,286
)

 139,014

 (Loss) gain on remeasurement of investments

 ( 3,327,347
)

 2,700,000

 —

 Total non-operating (expense) income

 ( 2,414,715
)

 2,607,948

 435,665

 Loss before provision for income taxes and net loss of noncontrolling interest

 ( 19,592,219
)

 ( 19,182,265
)

 ( 13,339,371
)

 Tax provision

 ( 156,000
)

 ( 144,000
)

 ( 129,000
)

)

 ( 19,326,265
)

 ( 13,468,371
)

 Net loss attributable to the noncontrolling interest

 —

 35,498

 Net loss attributable to Kopin Corporation

 $
)

 $
 ( 19,325,917
)

 $
 ( 13,432,873
)

 Net loss per share:

 Basic and diluted

 $
 ( 0.18
)

 $
 ( 0.21
)

 $
 ( 0.15
)

 Weighted average number of common shares outstanding:

 Basic and diluted

 108,976,245

 91,429,106

 88,831,532

 See

 KOPIN

STATEMENTS OF COMPREHENSIVE LOSS

 Fiscal year ended

 2023

 2022

 2021

 $
)

 $
 ( 19,326,265
)

 $
 ( 13,468,371
)

 Other comprehensive gain (loss), net of tax:

 Foreign currency translation adjustments

 42,027

 ( 36,478
)

 ( 51,736
)

 Unrealized holding gain (loss) on marketable securities

 14,644

 ( 201,283
)

 ( 17,113
)

 Reclassifications of loss in net loss on marketable securities

 ( 445
)

 ( 522
)

 ( 1,234
)

 Total other comprehensive gain (loss), net of tax

)

)

 Comprehensive loss

 ( 19,691,993
)

 ( 19,564,548
)

 ( 13,538,454
)

 Comprehensive loss attributable to the noncontrolling interest

 —

 35,498

 Comprehensive loss attributable to Kopin Corporation

 $
 ( 19,691,993
)

 $
 ( 19,564,200
)

 $
 ( 13,502,956
)

 See

 KOPIN

STATEMENTS OF STOCKHOLDERS' EQUITY

 Shares

 Amount

 Capital

 Stock

 Deficit

 Interest

 Common Stock

 Additional Paid-in

 Treasury

 Accumulated Other Comprehensive

 Accumulated

 Total Kopin Corporation Stockholders'

 Noncontrolling

 Total Stockholders'

 Shares

 Amount

 Capital

 Stock

 Deficit

 Interest

 Balance, December 26, 2020

 88,007,535

 $
 880,075

 $
 341,512,893

 $
 ( 9,793,946
)

 $
 1,484,434

 $
 ( 305,648,025
)

 $
 28,435,431

 $
 ( 136,836
)

 $
 28,298,595

 Vesting of restricted stock

 1,576,953

 15,770

 ( 15,770
)

 -

 -

 -

 -

 -

 -

 Stock-based compensation expense

 -

 -

 -

 -

 -

 -

 Other comprehensive loss

 -

 -

 -

 -

)

 -

)

 -

)

 Restricted stock for tax withholding obligations

 ( 47,859
)

 ( 479
)

 ( 235,491
)

 ( 366,110
)

 -

 -

 ( 602,080
)

 -

 ( 602,080
)

 Issuance of common stock, net of costs

 532,540

 5,325

 4,141,876

 -

 -

 -

 4,147,201

 -

 4,147,201

 Sale of treasury stock, net of costs

 -

 -

 7,110,227

 9,793,946

 -

 -

 16,904,173

 -

 16,904,173

 -

 -

 -

 -

 -

 ( 13,432,873
)

 ( 13,432,873
)

 ( 35,498
)

 ( 13,468,371
)

 Balance, December 25, 2021

 90,069,169

 900,691

 356,931,157

 ( 366,110
)

 1,414,351

 ( 319,080,898
)

 39,799,191

 ( 172,334
)

 39,626,857

 Vesting of restricted stock

 680,943

 6,809

 ( 6,809
)

 -

 -

 -

 -

 -

 -

 Stock-based compensation expense

 -

 -

 -

 -

 -

 -

 Other comprehensive loss

 -

 -

 -

 -

)

 -

)

 -

)

 Restricted stock for tax withholding obligations

 -

 -

 -

 ( 198,740
)

 -

 -

 ( 198,740
)

 -

 ( 198,740
)

 Issuance of common stock, net of costs

 2,204,047

 22,040

 2,375,578

 -

 -

 -

 2,397,618

 -

 2,397,618

 Sale of treasury stock, net of costs

 -

 -

 -

 461,723

 -

 -

 461,723

 -

 461,723

 -

 -

 -

 -

 -

 ( 19,325,917
)

 ( 19,325,917
)

 ( 348
)

 ( 19,326,265
)

 Balance, December 31, 2022

 92,954,159

 929,540

 360,567,631

)

 1,176,068

 ( 338,406,815
)

 24,163,297

)

 23,990,615

 Balance

 92,954,159

 929,540

 360,567,631

)

 1,176,068

 ( 338,406,815
)

 24,163,297

)

 23,990,615

 Vesting of restricted stock

 2,367,892

 23,680

 ( 23,680
)

 -

 -

 -

 -

 -

 -

 Stock-based compensation expense

 -

 -

 -

 -

 -

 -

 Other comprehensive gain

 -

 -

 -

 -

 -

 -

 Other comprehensive gain loss

 -

 -

 -

 -

 -

 -

 Acquisition of noncontrolling interest

 -

 -

)

 -

 -

 -

)

 172,682

 -

 Issuance of common stock, net of costs

 17,000,000

 170,000

 21,165,000

 -

 -

 -

 21,335,000

 -

 21,335,000

 -

 -

 -

 -

 -

)

)

 -

)

 Balance, December 30, 2023

 112,322,051

 $
 1,123,220

 $
 385,411,542

 $
)

 $
 1,232,294

 $
 ( 358,155,034
)

 $

 $
 -

 $

 Balance

 112,322,051

 $
 1,123,220

 $
 385,411,542

 $
)

 $
 1,232,294

 $
 ( 358,155,034
)

 $

 $
 -

 $

 See

 KOPIN

STATEMENTS OF CASH FLOWS

 Fiscal year ended

 2023

 2022

 2021

 Cash flows from operating activities:

 $
)

 $
 ( 19,326,265
)

 $
 ( 13,468,371
)

 Adjustments to reconcile net loss to net cash used in operating activities:

 Depreciation and amortization

 608,222

 722,024

 668,691

 Accretion of premium or discount on marketable debt securities

 —

 7,517

 Stock-based compensation

 Net loss (gain) on remeasurement of investments

 2,887,893

 ( 2,700,000
)

 ( 300,000
)

 Income taxes

 —

 143,345

 128,279

 Foreign currency losses (gains)

 91,791

 449,443

 ( 186,942
)

 Loss on sale of property and plant

 46,231

 317,032

 99,228

 Change in allowance for credit losses

 709,721

 162,638

 ( 26,704
)

 Write-off of excess inventory

 1,143,622

 2,078,750

 588,175

 Change in warranty reserves

 193,708

 2,329,000

 9,552

 Changes in assets and liabilities:

 Accounts receivable

 ( 5,271,763
)

 6,806,578

 ( 3,364,990
)

 Contract assets and unbilled receivables

 821,094

 ( 1,835,518
)

 1,379,436

 ( 2,255,352
)

 ( 2,010,749
)

 ( 2,728,404
)

 Prepaid expenses, other current assets and other assets

 ( 202,504
)

 908,156

 ( 691,573
)

 Accounts payable and accrued expenses

 1,836,038

 ( 3,859,768
)

 143,379

 Contract liabilities and billings in excess of revenue earned

 3,568

 ( 3,139,749
)

 2,577,523

 Net cash used in operating activities

 ( 15,260,677
)

 ( 17,687,250
)

 ( 10,747,782
)

 Cash flows from investing activities:

 Proceeds from sale of marketable debt securities

 10,374,593

 2,000,024

 1,100,000

 Purchase of equity investments

 —

 ( 499,998
)

 —

 Other assets

 62,694

 20,909

 ( 12,822
)

 Capital expenditures

 ( 949,487
)

 ( 832,712
)

 ( 1,033,503
)

 Purchases of marketable debt securities

 ( 17,624,779
)

 ( 4,000,042
)

 —

 Net cash (used in) provided by investing activities

 ( 8,136,979
)

 ( 3,311,819
)

 53,675

 Cash flows from financing activities:

 Sale of treasury stock, net of costs

 —

 461,723

 16,904,173

 Issuance of common stock, net of costs

 21,335,000

 2,397,618

 4,147,200

 Settlements of restricted stock for tax withholding obligations

 —

 ( 198,740
)

 ( 602,080
)

 Net cash provided by financing activities

 21,335,000

 2,660,601

 20,449,293

 Effect of exchange rate changes on cash

 14,463

 ( 190,585
)

 ( 80,124
)

 Net (decrease) increase in cash, cash equivalents and restricted cash

 ( 2,048,193
)

 ( 18,529,053
)

 9,675,062

 Cash and cash equivalents at beginning of year

 8,258,878

 26,787,931

 17,112,869

 Cash, cash equivalents and restricted cash at end of year

 $
 6,210,685

 $
 8,258,878

 $
 26,787,931

 Supplemental disclosure of cash flow information:

 Construction in progress included in accrued expenses

 $
 200,000

 $
 168,000

 $
 —

 See

 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

 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 subsidiaries, unless the context
indicates another meaning.

Year

 The
Company's fiscal year ends on the last Saturday in December. The fiscal year ended December 30, 2023 includes 52 weeks, the fiscal
year ended December 31, 2022 includes 53 weeks, and the fiscal year ended December 25, 2021 includes 52 weeks, and are referred to as
fiscal years 2023, 2022 and 2021, respectively, herein.

 Principles
of Consolidation

 The
consolidated financial statements for fiscal year 2023 include the accounts of Kopin Corporation and its wholly owned subsidiaries.
For fiscal years 2022 and 2021, the consolidated financial statements include the accounts of Kopin Corporation and its wholly owned
subsidiaries and a majority owned 80 %
subsidiary, eMDT America, Inc., located in California (collectively the Company). In the first quarter of fiscal year 2023, the
Company acquired the remaining 20 % interest in eMDT America, Inc. Net loss attributable to noncontrolling interest in the
Company's consolidated statements of operations represents the portion of the results of operations of which is allocated to
the shareholders of the equity interests not owned by the Company. All intercompany transactions and balances have been
eliminated.

 The
Company has incurred net losses of $ 19.7 million and $ 19.3 million for the year ended December 30, 2023, and for the fiscal year ended
December 31, 2022, respectively, and net cash outflows from operations of $ 15.3 million and $ 17.7 million for the year ended December
30, 2023, and for the fiscal year ended December 31, 2022, respectively. 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, production inefficiencies
resulting from intermittent supply chain disruptions and litigation costs. Management has implemented certain plans to reduce cash outflows
including operational improvements and the curtailment of certain development programs, both of which are expected to preserve cash.
The litigation is discussed in Note 12. In addition, in the first quarter of 2024, the Company sold 3.1 million shares of
common stock for net proceeds of $ 7.3 million. The Company believes that its existing cash, cash equivalents, along with the net proceeds
received in the first quarter of 2024 will be adequate to satisfy its current operating plans for at least the next twelve months from
the issuance of these financial statements. The Company has in the past sold equity securities through at-the-market equity offerings
and in the traditional fashion of significant equity offerings. Nonetheless, management monitors the capital markets on an ongoing basis
and may consider raising capital if favorable market conditions develop. If the Company's actual results are less than projected
or the Company needs to raise capital for additional liquidity, the Company may be required to do additional equity financings, reduce
expenses, or enter into a strategic transaction. However, management can make no assurance that the Company will be able to raise additional
capital, reduce expenses sufficiently, or enter into a strategic transaction on terms acceptable to the Company, or at all.

Recognition

 Substantially
all of 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.

 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 retains a small portion of the contract price
until completion of the contract. The portion of the payments retained until the 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 and some
commercial customers, the Company typically receives interim 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. The 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 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.

 NOTES

 To
determine the proper revenue recognition method for contracts with the same customer, the Company evaluates whether two or more
contracts should be combined and accounted for as one single contract and whether the combined or single contract should be
accounted for as more than one performance obligation. 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. Hence, the entire contract is accounted for as one performance obligation. Less frequently, however, the Company may
promise to provide distinct goods or services within a contract in which case the Company separates the contract into more than one
performance obligation. If a contract is separated into more than one performance obligation, the Company allocates the total
transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the
promised goods or services underlying each performance obligation. In cases where the Company sells standard products, the
observable standalone sales are used to determine the standalone selling price.

 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 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. For contracts with 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.

 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 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 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 on
many of the Company's 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. The Company
has 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 the Company's subcontractors. For contract change orders, claims or
similar items, the Company applies judgment in estimating the amounts and assessing the potential for realization. These amounts are
only included in contract value when they can be reliably estimated and realization is considered probable. If the Company's
estimate of total contract costs or its determination of whether the customer agrees that a milestone is achieved is incorrect, the Company's
revenue could be overstated or understated and the profits or loss reported could be subject to adjustment.

 For
the Company's commercial customers, revenue is recognized when obligations under the terms of a contract with the customer is
satisfied and the Company transfers control of the products or services, which is generally upon delivery to the customer. Revenue
is recorded as the amount of consideration the Company expects 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. The Company analyzes 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 inventory. Sales, value add and other taxes the Company collects concurrent with revenue-producing activities are excluded from
revenue.

 NOTES

 The
rights and benefits to the Company's intellectual property are conveyed to certain customers through technology license agreements.
These agreements may include other performance obligations including the sale of product to the customer. 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. The sale of materials is
recognized at a point in time which occurs with the transfer of control of the Company's products or services. In certain instances,
the Company is entitled to sales-based royalties under 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 were as follows:

 Schedule of Satisfaction of Performance Obligations

 Fiscal year ended

 2023

 2022

 2021

 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 (e.g., indefinite-delivery,
indefinite-quantity ("IDIQ")). As of December 30, 2023, the aggregate amount of the transaction price allocated to
remaining performance obligations was $ 25.9
million, which the Company expects to recognize revenue over the next 12 months. The remaining performance obligations represent
amounts to be earned under government contracts, which are subject to cancellation.

 NOTES

 Research
and Development Costs

 Research
and development expenses are incurred in support of internal display product development programs or programs funded by agencies or prime
contractors of the U.S. Government and commercial partners. Research and development costs include staffing, purchases of materials and
laboratory supplies, circuit design costs, fabrication and packaging of experimental display products, and overhead, and are expensed
immediately.

 Cash,
Cash Equivalents and Restricted Cash

 The
Company considers all highly liquid, short-term debt instruments with original maturities of three months or less to be cash equivalents.

 Restricted
cash of approximately $ 0.5 million is included on the consolidated balance sheet as of December 30, 2023, and represents cash deposited
by the Company into a separate account and designated as collateral for a standby letter of credit in the same amount in accordance with
a contractual agreement with a vendor.

 Marketable
Debt Securities

 Marketable
debt securities consist primarily of commercial paper, medium-term corporate notes, and U.S. Government and agency-backed securities.
The Company classifies these marketable debt securities as available-for-sale at fair value in "Marketable debt securities, at
fair value" in the consolidated balance sheets. The Company records the amortization of premiums and accretion of discounts on
marketable debt securities in the results of operations.

 The
Company uses the specific identification method as a basis for determining cost and calculating realized gains and losses with respect
to marketable debt securities. The gross gains and losses realized related to sales and maturities of marketable debt securities were
not material during the fiscal years ended 2023, 2022 and 2021.

 Fair
Value of Financial Instruments

instruments consist of marketable debt securities, accounts receivable and certain current liabilities. These assets (excluding marketable
securities which are recorded at fair value) and liabilities are carried at cost, which approximates fair value.

 Inventories
are stated at standard cost adjusted to approximate the lower of cost (first-in, first-out method) or net realizable value. The Company
adjusts inventory carrying value for the estimated difference between the cost of inventory and the estimated net realizable value based
upon assumptions about future demand and market conditions. The Company fully reserves for inventories and non-cancellable purchase orders
for inventory deemed obsolete. The Company performs periodic reviews of inventory items to identify excess inventories on hand by comparing
on-hand balances to anticipated usage using recent historical activity as well as anticipated or forecasted demand. If estimates of customer
demand diminish further or market conditions become less favorable than those projected by the Company, additional inventory adjustments
may be required. Inventory write-downs are inherently difficult to assess and dependent on market conditions. At the point of a loss
recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result
in the restoration or increase in that newly established basis.

consists of the following at December 30, 2023 and December 31, 2022:

 Schedule of Inventory

 2023

 2022

 Raw materials

 $
 4,785,197

 $
 4,285,757

 Work-in-process

 2,018,421

 1,735,454

 Finished goods

 798,188

 405,189

 Total

 $
 7,601,806

 $
 6,426,400

 NOTES

 Property,
Plant and Equipment

 Property,
plant and equipment are recorded at cost. Depreciation and amortization are provided using the straight-line method over the estimated
useful lives of the assets, generally 3 to 5 years. Leasehold improvements and leased equipment are amortized over the shorter of the
term of the lease or the useful life of the improvement or equipment. As discussed below, obligations for asset retirement are accrued
at the time property, plant and equipment is initially purchased or as such obligations are generated from use.

 Recognition
and Measurement of Financial Assets and Liabilities

 The Company
periodically makes equity investments in private companies, accounted for as an equity investment, whose values are difficult to determine.
The Company uses the measurement alternative for equity investments without readily determinable fair values which is often referred
to as cost method investments. When assessing investments in private companies for impairment, the Company considers such factors as, among other
things, 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 the Company does not control,
the Company may not be able to obtain all of the information the Company would want in order to make a complete assessment of the investment on a timely
basis. Accordingly, the Company's estimates may be revised if other information becomes available at a later date.

 Product
Warranty

 The
Company generally sells products with a limited warranty of product quality and a limited indemnification of customers against intellectual
property infringement claims related to the Company's products. The Company accrues for known warranty and indemnification issues
if a loss is probable and can be reasonably estimated and accrues for estimated incurred but unidentified issues based on historical
activity.

 Extended
Warranties

 The
Company recognizes revenue from an extended warranty on the straight-line method over the life of the extended warranty, which is typically
12 to 18 months beyond the standard 12-month warranty. The Company classifies the current portion of extended warranties under Contract
liabilities and billings in excess of revenue earned and the noncurrent portion of extended warranties under Noncurrent contract liabilities
and asset retirement obligations in its consolidated balance sheets. The Company had approximately less than $ 10,000 of contract
liabilities related to extended warranties at December 30, 2023 and December 31, 2022.

 Asset
Retirement Obligations

 The
Company recorded asset retirement obligations ("ARO") liabilities of $ 0.3 million and $ 0.2 million at December 30, 2023 and
December 31, 2022, respectively. This represents the legal obligations associated with the retirement of the Company's assets when
the timing and/or method of settling the obligation are conditional on a future event that may or may not be within the control of the
Company. Changes in ARO liabilities for fiscal years 2023 and 2022 are as follows:

of Changes in Asset Retirement Obligations

 2023

 2022

 Beginning balance

 $
 242,094

 $
 267,970

 Exchange rate change

 12,586

 ( 25,876
)

 Ending balance

 $
 254,680

 $
 242,094

 NOTES

Taxes

 The
consolidated financial statements reflect provisions for federal, state, local and foreign income taxes. The Company recognizes deferred
tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax basis, as well as operating loss and tax credit carryforwards. The Company
measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is recognized in income in the period that includes the enactment date. The Company provides valuation allowances
if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

 The
2017 Act imposes a U.S. tax on global intangible low taxed income ("GILTI") that is earned by certain foreign affiliates
owned by a U.S. shareholder. The Company has made a policy election to treat future taxes related to GILTI as a current period expense
in the reporting period in which the tax is incurred.

 Foreign
Currency

 Assets
and liabilities of non-U.S. operations where the functional currency is other than the U.S. dollar are translated from the functional
currency into U.S. dollars at year end exchange rates, and revenues and expenses are translated at average rates prevailing during the
year. Resulting translation adjustments are accumulated as part of accumulated other comprehensive income. Transaction gains or losses
are recognized in income or loss in the period in which they occur.

 Net
Loss Per Share

 Basic
net loss per share is computed using the weighted-average number of shares of common stock outstanding during the period less any unvested
restricted shares. Diluted net loss per share is calculated using weighted-average shares outstanding and contingently issuable shares,
less weighted-average shares reacquired during the period. The net outstanding shares are adjusted for the dilutive effect of shares
issuable upon the assumed conversion of the Company's common stock equivalents, which consist of outstanding stock options and
unvested restricted stock.

 The
following were not included in weighted-average common shares outstanding-diluted because they are anti-dilutive:

 Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share

 2023

 2022

 2021

 Nonvested restricted common stock

 1,931,767

 1,965,901

 2,077,592

 Concentration
of Credit Risk

instruments that potentially subject the Company to concentration of credit risk other than marketable securities consist principally
of trade accounts receivable. Trade receivables are primarily derived from sales to manufacturers of consumer electronic devices and
wireless components or defense applications. The Company sells its products to customers worldwide and generally does not require collateral.
The Company maintains a reserve for potential credit losses.

 The
Company primarily invests its excess cash in government-backed and corporate debt securities that management believes to be of high creditworthiness,
which bear lower levels of relative credit risk. The Company relies on rating agencies to ascertain the creditworthiness of its marketable
securities and, where applicable, guarantees made by the Federal Deposit Insurance Company.

 Other-than-Temporary
Impairments

 The
Company conducts a review of its marketable debt securities on a quarterly basis for the presence of other-than-temporary impairment
("OTTI"). The Company assesses whether OTTI is present when the fair value of a debt security is less than its amortized
cost basis at the balance sheet date. Under these circumstances OTTI is considered to have occurred (1) if the Company intends to sell
the security before recovery of its amortized cost basis; (2) if it is "more likely than not" the Company will be required
to sell the security before recovery of its amortized cost basis; or (3) the present value of expected cash flows is not sufficient to
recover the entire amortized cost basis.

 NOTES

 The
Company further estimates the amount of OTTI resulting from a decline in the creditworthiness of the issuer (credit-related OTTI) and
the amount of non-credit-related OTTI. Non-credit-related OTTI can be caused by such factors as market illiquidity. Credit-related OTTI
is recognized in earnings while non-credit-related OTTI on securities not expected to be sold is recognized in other comprehensive income
(loss). The Company did not record any OTTI for the fiscal years 2023, 2022 and 2021.

 Stock-Based
Compensation

 The
fair value of nonvested restricted common stock awards is generally the quoted price of the Company's equity shares on the date
of grant. The nonvested restricted common stock awards require the employee to fulfill certain obligations, including remaining employed
by the Company for periods ranging from one to five years (the vesting period) and in certain cases also require meeting either performance
criteria or market conditions. The performance criteria primarily consist of the achievement of established milestones. For nonvested
restricted common stock awards which solely require the recipient to remain employed with the Company, the stock compensation expense
is amortized over the anticipated service period. For nonvested restricted common stock awards which require the achievement of performance
criteria, the Company reviews the probability of achieving the performance goals on a periodic basis. If the Company determines that
it is probable that the performance criteria will be achieved, the amount of compensation cost derived for the performance goal is amortized
over the service period. If the performance criteria are not met, no compensation cost is recognized, and any previously recognized compensation
cost is reversed. The Company recognizes compensation costs on a straight-line basis over the requisite service period for time vested
awards.

 Comprehensive
Loss

 Comprehensive
loss is the total of net (loss) income and all other non-owner changes in equity including such items as unrealized holding (losses)
gains on marketable equity and debt securities classified as available-for-sale and foreign currency translation adjustments.

 The
components of accumulated other comprehensive income are as follows:

 Schedule of Accumulated Other Comprehensive Income

 Foreign Currency
 Translation
 Adjustment

 Unrealized
 holding
 loss on marketable
 securities

 Reclassifications
 of
 loss in net loss
 on
 marketable
 securities

 Accumulated Other
 Comprehensive

 Balance as of December 26, 2020

 $
 1,162,506

 $
 385,447

 $
 ( 63,519
)

 $
 1,484,434

 Changes during year

 ( 51,736
)

 ( 17,113
)

 ( 1,234
)

)

 Balance as of December 25, 2021

 1,110,770

 368,334

 ( 64,753
)

 1,414,351

 Changes during year

 ( 36,478
)

 ( 201,283
)

 ( 522
)

)

 Balance as of December 31, 2022

 1,074,292

 167,051

 ( 65,275
)

 1,176,068

 Changes during year

 42,027

 14,644

 ( 445
)

 Balance as of December 30, 2023

 $
 1,116,319

 $
 181,695

 $
 ( 65,720
)

 $
 1,232,294

 NOTES

 Impairment
of Long-Lived Assets

 The
Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount
of an asset group may not be recoverable. Examples of such triggering events applicable to the Company's assets include, but are
not limited to, a significant decrease in the market price of a long-lived asset or asset group, a current-period operating or cash flow
loss combined with a history of operating or cash flow losses, a projection or forecast that demonstrates continuing losses associated
with the use of a long-lived asset or asset group, or adverse industry or economic trends. If any indicator of impairment exists, the
Company would then assess the recoverability of the affected long-lived assets by determining whether the carrying value of the asset
group can be recovered through undiscounted future operating cash flows. If impairment is indicated, the Company would estimate the asset
group's fair value using future discounted cash flows associated with the use of the asset group and adjust the carrying value
of the asset group accordingly. Given the Company's history of negative operating losses and negative operating cash flows, the
Company performed a quantitative test of its long-lived assets. Upon completion of its quantitative assessment as of December 30, 2023,
the Company has concluded there was no impairment.

 Leases

 The
Company accounts for leases under Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842). The Company
used the package of practical expedients permitted under the transition guidance within the new standard, which, among other things,
allows it to carry forward the historical lease classification. The Company did not elect the practical expedient to use hindsight in
determining the lease term and in assessing impairment of right-of-use assets.

 The
Company determines if an arrangement is a lease or contains an embedded lease at inception. For lease arrangements with both lease and
non-lease components (e.g., common-area maintenance costs), the Company accounts for the non-lease components separately.

 All
of the Company's leases are operating leases. Operating lease right-of-use assets and operating lease liabilities are recognized
based on the present value of future lease payments over the lease term at the commencement date. The operating lease right-of-use assets
also include any initial direct costs and any lease payments made at or before the commencement date and is reduced for any unrestricted
incentives received at or before the commencement date.

 For
the majority of the Company's leases, the discount rate used to determine the present value of the lease payments is the Company's
incremental borrowing rate at the lease commencement date, as the implicit rate is not readily determinable. The discount rate represents
a risk-adjusted rate on a secured basis and is the rate at which the Company would borrow funds to satisfy the scheduled lease liability
payment streams commensurate with the lease term. For new or renewed leases, the discount rate is determined using available data at
lease commencement and based on the lease term including any reasonably certain renewal periods.

 Some
of the Company's leases include options to extend or terminate the lease. The Company includes these options in the
recognition of the Company's ROU assets and lease liabilities when it is reasonably certain that the Company will exercise the
option. In most cases, the Company has concluded that renewal and early termination options are not reasonably certain of being
exercised by the Company (and thus not included in its Right of Use ("ROU") asset and lease liability) unless there is
an economic, financial or business reason to do so. None of the Company's leases include variable lease-related payments, such as escalation
clauses based on the consumer price index ("CPI") rates or residual guarantees.

 NOTES

 Recently
Issued Accounting Pronouncements

 In
June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.
The amendments in ASU 2016-13 will provide more decision-useful information about the expected credit losses on financial instruments
and other commitments to extend credit held by a reporting entity at each reporting date. The ASU is effective for annual reporting periods
beginning after December 15, 2019, including interim periods within that year. Following the release of ASU 2019-10 in November 2019,
the new effective date, as long as the Company remains a smaller reporting company, would be annual reporting periods beginning after
December 15, 2022. The Company adopted this standard on January 1, 2023 and there was not a material impact.

 2.
 Property, Plant and Equipment

 Property,
plant and equipment consisted of the following at December 30, 2023 and December 31, 2022:

 Schedule of Property Plant and Equipment

 Useful Life

 2023

 2022

 Equipment

 3 - 5 years

 $
 14,025,078

 $
 13,965,126

 Leasehold improvements

 Life of the lease

 3,631,518

 3,600,557

 Furniture and fixtures

 3 years

 165,636

 174,622

 Equipment under construction

 957,915

 550,219

 Property, plant and equipment, gross

 18,780,147

 18,290,524

 Accumulated depreciation and amortization

 ( 16,616,730
)

 ( 16,458,883
)

 Property, plant and equipment, net

 $
 2,163,417

 $
 1,831,641

 Depreciation
expense for fiscal year 2023 was approximately $ 0.6 million and $ 0.7 million for fiscal years 2022 and 2021.

 3.
 Leases

 The
Company enters into operating leases primarily for manufacturing, engineering, research, administration and sales facilities, and information
technology ("IT") equipment. At December 30, 2023 and December 31, 2022, the Company did not have any finance leases. Almost
all of the Company's future lease commitments, and related lease liability, relate to the Company's facility leases. Some
of the Company's leases include options to extend or terminate the lease. In the fourth quarter of 2022, the Company impaired its
Operating lease right-of-use assets related to the Technology License Agreement and an Asset Purchase Agreement with Lightning Silicon
Technology, Inc. discussed in Note 5 Financial Instruments.

 Schedule of Lease Expense

 2023

 2022

 Operating lease cost

 $
 865,377

 $
 985,967

 NOTES

 At
December 30, 2023, the Company's future lease payments under non-cancellable leases were as follows:

 Schedule of Future Lease
Payment Under Non-cancellable Lease

 2024

 $
 795,884

 2025

 639,373

 2026

 604,000

 2027

 604,000

 2028

 201,333

 Thereafter

 —

 Total future lease payments

 2,844,590

 Less imputed interest

 ( 360,105
)

 Total

 $
 2,484,485

 Supplemental
cash flow information related to leases was as follows:

 Schedule of Supplemental Information Related To Leases

 2023

 2022

 Cash paid for amounts included in the measurement of operating lease liabilities

 $
 983,289

 $
 993,633

 Other
information related to leases was as follows:

 2023

 2022

 Weighted Average Discount Rate—Operating Leases

 6.21
 %

 5.94
 %

 Weighted Average Remaining Lease Term—Operating Leases (in years)

 4.04

 4.69

 4.
 Contract Assets and Liabilities

 Net
contract assets (liabilities) consisted of the following:

 Schedule of Contract with Customer, Asset and Liability

 December
 31, 2022

 $ Change

 % Change

 Contract assets and unbilled receivables

 $
 3,409,809

 $
 4,068,364

 $
 ( 658,555
)

 ( 16
)%

 Contract liabilities and billings in excess of revenue earned

 ( 916,826
)

 ( 930,500
)

 13,674

 ( 1
)%

 Noncurrent contract liabilities

 ( 23,198
)

 ( 6,190
)

 ( 17,008
)

 %

 Net contract assets

 $
 2,469,785

 $
 3,131,674

 $
 ( 661,889
)

 ( 21
)%

 NOTES

 The
$ 0.7 million
decrease in the Company's net contract assets from December 31, 2022 to December 30, 2023 was primarily due to a reduction in contract
assets from the collection of amounts owed.

 The
Company recognized revenue of approximately $ 0.9 million, $ 3.7 million, and $ 1.5 million related to its contract liabilities during the
years ended December 30, 2023, December 31, 2022, and December 25, 2021, respectively.

 The
Company did not recognize impairment losses on its contract assets during the years ended December 30, 2023, December 31, 2022, and December
25, 2021.

 5.
 Financial Instruments

 Fair
Value Measurements

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. An investment is categorized as Level 3 if its fair value is based on assumptions developed by the Company about what a
market participant would use in pricing the assets.

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

 Schedule of Fair Value Measurements of Financial Assets

 Total

 Level 1

 Level 2

 Level 3

 Fair Value Measurement at December 30, 2023 Using:

 Total

 Level 1

 Level 2

 Level 3

 Cash equivalents

 $
 5,079,605

 $
 5,079,605

 $
 —

 $
 —

 U.S. Government and agency backed securities

 —

 —

 Certificates of deposit

 7,717,625

 7,717,625

 —

 —

 Equity Investments

 4,688,522

 174,178

 —

 4,514,344

 Financial instruments,
 owned, at fair value

 $
 21,960,127

 $
 12,971,408

 $

 $
 4,514,344

 NOTES

 Total

 Level 1

 Level 2

 Level 3

 Fair Value Measurement at December 31, 2022 Using:

 Total

 Level 1

 Level 2

 Level 3

 Cash equivalents

 $
 5,933,386

 $
 5,933,386

 $
 —

 $
 —

 U.S. Government and agency backed securities

 2,397,730

 —

 2,397,730

 —

 Corporate debt

 1,500,445

 —

 1,500,445

 —

 Certificates of deposit

 490,603

 490,603

 —

 —

 Equity Investments

 7,721,206

 213,016

 —

 7,508,190

 Financial instruments,
 owned, at fair value

 $
 18,043,370

 $
 6,637,005

 $
 3,898,175

 $
 7,508,190

 The
carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate
fair value because of their short-term nature. If accrued liabilities were carried at fair value, these would be classified as Level
2 in the fair value hierarchy.

in Level 3 investments are as follows:

 Schedule of Fair Value, Liabilities Measured On Recurring Basis

 December 31,
 2022

 Unrealized
 losses

 Purchases,
 issuances
 and
 settlements

 December 30,
 2023

 Equity investments

 $
 7,508,190

 $
 ( 3,433,300
)

 $
 439,454

 $
 4,514,344

Investments

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 (often referred to as cost method investments) on a prospective basis. As a result, these investments will be revalued upon
occurrence of an observable price change for similar investments and for impairments. The Company has limited, if any, control over
their governance, financial reporting and operations. The Company relies on the financial reporting provided by these investments in
order to evaluate them for possible impairment. As a result, the Company faces certain operating, financial and other risks relating
to these investments, including risks related to the financial strength of the investments.

 On
January 5, 2023, the Company entered into a Technology License Agreement and an Asset Purchase Agreement (the "LST
Agreements") with Lightning Silicon Technology, Inc. ("LST"). Pursuant to the LST Agreements, the Company issued a
license to LST for certain technology associated with its Organic Light Emitting Technology, transferred in-process development
contracts with two customers and accounts receivables that the Company had previously determined were not collectible. The
technology license agreement provides for Kopin to transfer certain patents to LST if LST achieves certain milestones, however upon
transfer Kopin will receive a license to the technology. To the extent LST makes improvements to the technology licensed from Kopin,
Kopin will receive a license for these improvements for certain markets. Kopin is not obligated to provide any additional funding
support to LST. As consideration for the transaction, the Company received 18,000,000
common shares representing a 20.0 %
equity stake in LST. The Company will also receive a royalty based on unit sales of products that utilize the technology licensed.
Drs. John Fan, the Company's former President and CEO and former Chairman of the Board, Boryeu Tsaur, a former Executive Vice
President of the Company and Hong Choi, the Company's former Chief Technology Officer terminated their employment with the
Company and became investors in and members of the management team of LST. Dr. Fan is the Founder of LST. As a result of this
transaction, in 2022 the Company wrote off the two operating lease assets associated with facilities used for the development of the
Company's organic light emitting diode (OLED) products. The Company has recorded its investment in LST at $ 0
as of December 30, 2023.

 The
Company has an equity interest in a company which it acquired through purchasing capital and contributing certain intellectual
property totaling $ 3.9
million by December 26, 2020. In the third quarter of 2022, the Company reviewed the financial condition of its equity interest in
the company and, as a result of valuing the investment through discounted cash flow and guideline public company methods, recorded
an impairment charge of $ 2.0
million to reduce the value of its investment. For the years ended December 30, 2023, December 31, 2022 and December 25, 2021, the
Company recorded approximately $ 0.2
million, $ 0.3
million and $ 0.1
million of unrealized losses on this equity investment, respectively, due to a fluctuation in the foreign exchange rate. As of
December 30, 2023, the Company owned an approximate 10 %
interest in this investment and the carrying value of this equity investment was $ 1.5
million at December 30, 2023 and $ 1.6
million at December 31, 2022.

 The Company has an investment in RealWear Inc. (RealWear) which had been reduced to $ 0 due to an impairment analysis.
In the first quarter of 2022, RealWear raised additional equity capital and based on an observable price change of the customer's
share prices and terms of the equity sale, the Company remeasured the fair market value of its investment and recorded a gain of $ 4.7
million. In the second quarter of 2022, the Company made an additional equity investment of $ 0.5 million. In the second quarter of 2023,
the Company received shares valued at approximately $ 0.4 million as payment of royalties. In the second quarter of 2023, the Company reviewed
the financial condition and an observable price point in an equity transaction, and as a result, the Company recorded an impairment charge
of $ 3.1 million to reduce the value of the investment to $ 2.5 million. As of December 30, 2023, the Company owned an approximate 3.3 %
interest in this investment.

 NOTES

 On
September 30, 2019 the Company entered into an Asset Purchase Agreement (the "Solos Purchase Agreement") pursuant to
which the Company sold and licensed certain assets of the Company's Solos TM ("Solos") product line and
Whisper TM Audio ("Whisper") technology. As consideration for the transaction the Company received a 20.0 %
equity stake in Solos Incorporation ("Solos Inc."). The Company's 20.0 %
equity stake will be maintained until Solos Inc. has raised a total of $ 7.5
million in equity financing. The Company will also receive a royalty in the single digits on the net sales amount of Solos products
for a three-year period, after the commencement of commercial production. The Company has performed the analysis and identified
Solos Technology as a variable interest entity that should not be consolidated by Kopin, as Kopin is not the primary beneficiary of
the entity. Kopin is not obligated to provide any additional funding support to Solos Inc., and its potential loss exposure is the
value of the investment recorded on its books. Based on the price paid for equity by the other 80.0 %
owners of Solos Inc., volatility based on a peer group and assumptions about the risk-free interest rate, the Company estimated the
fair value of its equity holdings at $ 0.6
million and in 2019 recorded a $ 0.6
million gain on its investment for this equity transaction as the basis of assets transferred was zero. In the second quarter of
2023, the Company reviewed the financial condition and other factors of the customer and, as a result, the Company recorded an
impairment charge of $ 0.2
million to reduce its investment in the customer to $ 0.2
million. The investment balance is $ 0.2
million as of December 30, 2023.

 Marketable
Debt Securities

 The
Company's corporate debt consists of floating rate notes with a maturity that is over multiple years but has interest rates
that are reset every three months based on the then-current three-month London Interbank Offering Rate ("three-month
Libor"). The Company validates the fair market values of the financial instruments above by using discounted cash flow models,
obtaining independent pricing of the securities or through the use of a model that incorporates the three-month Libor, the credit
default swap rate of the issuer and the bid and ask price spread of the same or similar investments which are traded on several
markets. The restricted cash balance at December 30, 2023 is invested in a certificate of deposit and is classified as a Corporate
debt available-for-sale marketable debt security. Investments in available-for-sale marketable debt securities are as follows at
December 30, 2023 and December 31, 2022:

 Schedule of Available-for-sale Marketable Debt Securities

 Amortized Cost

 Unrealized Losses

 Fair Value

 2023

 2022

 2023

 2022

 2023

 2022

 U.S. Government and agency backed securities

 $
 4,500,030

 $
 2,500,006

 $
 ( 25,655
)

 $
 ( 102,276
)

 $

 $
 2,397,730

 Corporate debt

 7,750,174

 2,000,012

 ( 32,549
)

 ( 8,964
)

 7,717,625

 1,991,048

 Total

 $
 12,250,204

 $
 4,500,018

 $
 ( 58,204
)

 $
 ( 111,240
)

 $
 12,192,000

 $
 4,388,778

 The
contractual maturity of the Company's marketable debt securities is as follows at December 30, 2023:

 Schedule of Contractual Maturity

 Less than
 One year

 One to
 Five years

 Total

 U.S. Government and agency backed securities

 $
 2,989,195

 $
 1,485,180

 $

 Corporate debt

 4,240,445

 3,477,180

 7,717,625

 Total

 $
 7,229,640

 $
 4,962,360

 $
 12,192,000

 6.
 Stockholders' Equity and Stock-Based Compensation

 Registered
Sale of Equity Securities

 In
the first quarter of fiscal year 2021, the Company sold 2.4
million shares of common stock for gross proceeds of $ 16
million (average of $ 6.66
per share), before deducting broker expenses paid by the Company of $ 0.5
million pursuant to the Company's At-The-Market Equity Offering Sales Agreement dated as of February 8, 2019 (the
"Previous ATM Agreement") with Stifel, Nicolaus & Company, Incorporated, ("Stifel") as agent. In the
second quarter of 2021, the Company sold 0.1
million shares of common stock for gross proceeds of $ 0.8
million (average of $ 6.74
per share), before deducting broker expenses paid by the Company of $0.1 million under the Previous ATM Agreement. The Previous ATM Agreement
has since terminated pursuant to its terms as a result of the sale of all the shares subject to such agreement. On March 5, 2021,
the Company entered into a new At-The-Market Equity Offering Sales Agreement (the "Current ATM Agreement") with Stifel
under which the Company may sell up to $ 50
million of the Company's common stock. In the third quarter of 2021, the Company sold 0.6
million shares of common stock for gross proceeds of $ 4.8
million (average of $ 8.06
per share), before deducting broker expenses paid by the Company of $ 0.1
million under the Current ATM Agreement.

 In
the second quarter of 2022, the Company sold 1.5 million shares of common stock and 0.2 million shares of treasury stock for gross proceeds of
$ 2.1 million (average of $ 1.26 per share) before deducting broker expenses paid by the Company of less than $ 0.1 million and in the third quarter
of 2022, the Company sold 675,000 shares of common stock for gross proceeds of approximately $ 0.9 million (average of $ 1.27 per share)
before deducting broker expenses paid by the Company of less than $ 0.1 million, pursuant to the Current ATM Agreement. The net proceeds from the
sale of common shares were used for general corporate purposes, including working capital.

 On
January 27, 2023, the Company sold 17 million shares of registered common stock and issued pre-funded warrants to purchase up to
 6,000,000 shares of common stock at a public offering price of $ 0.99 per pre-funded warrant, for gross proceeds of $ 22.9 million
before deducting underwriting discounts and offering expenses paid by the Company of $ 1.5 million. The offering price of the
pre-funded warrant equals the public offering price per share of the common stock less the $ 0.01 per share exercise price of each
pre-funded warrant. At December 30, 2023, the Company had available $ 41.4 million for sale of common stock under the Current ATM Agreement.

 Sale
of Treasury Stock

 During
the year ended December 31, 2022, the Company sold 126,389 shares of its common stock for approximately $ 0.2 million through the sale
of shares under its At The Market Offering Agreement, dated March 5, 2021. Commissions paid were less than $ 10,000.

 NOTES

 Restricted
Stock Awards

 In
2020, the Company adopted the 2020 Equity Incentive Plan ("2020 Equity Plan") which authorized the issuance of shares of
common stock to employees, certain consultants and advisors who perform services for the Company, and non-employee members of the
Board. The 2020 Equity Plan is a successor to the Company's 2010 Equity Incentive Plan ("2010 Equity Plan"). The
number of shares authorized under the 2020 Equity Plan was 4,000,000
shares of common stock, which has since been amended to authorize the issuance of 11,000,000
shares of common stock. In addition, shares of common stock underlying any outstanding award granted under the 2010 Equity Plan that
expires, or is terminated, surrendered or forfeited for any reason without issuance of such shares shall be available for the award
of new Grants under this Plan. As of December 30, 2023, the Company has approximately 5.8 million shares of common stock authorized
and available for issuance under the Company's 2020 Equity Plan.

 The
fair value of non-vested restricted common stock awards is generally the market value of the Company's common stock on the date
of grant. The non-vested restricted common stock awards require the employee to fulfill certain obligations, including remaining employed
by the Company for periods ranging from one to five years (the vesting period) and in certain cases also require meeting either performance
criteria or the Company's stock achieving a certain price. For non-vested restricted common stock awards that solely require the
recipient to remain employed with the Company, the stock compensation expense is amortized over the anticipated service period. For non-vested
restricted common stock awards that require the achievement of performance criteria, the Company reviews the probability of achieving
the performance goals on a periodic basis. If the Company determines that it is probable that the performance criteria will be achieved,
the amount of compensation cost derived for the performance goal is amortized over the anticipated service period. If the performance
criteria are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed.

 Schedule of Non-vested Restricted Stock Activity

 Shares

 Weighted Average Grant Fair Value

 Balance at December 25, 2021

 2,077,592

 $
 2.90

 Granted

 1,013,600

 1.33

 Forfeited

 ( 444,350
)

 2.45

 Vested

 ( 680,941
)

 2.82

 Balance at December 31, 2022

 1,965,901

 2.22

 Granted

 3,423,531

 1.58

 Forfeited

 ( 1,089,773
)

 2.52

 Vested

 ( 2,367,892
)

 1.62

 Balance at December 30, 2023

 1,931,767

 $
 1.65

 On
December 31, 2020 (fiscal year 2021), the Company amended the employment agreement with its former CEO, and as part of the amendment
issued five tranches of 188,000 shares of restricted stock grants. The Company used a Monte Carlo model to determine the estimated fair
value of the awards. Total compensation expense resulting from the awards is approximately $ 2.1 million. The Company's stock price
met the required levels in the first quarter of fiscal year 2021 and the total stock compensation expense was recognized in the first
quarter of fiscal year 2021. The following table describes inputs used to calculate fair value of the restricted stock grants:

 Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions

 Expected volatility

 94.2
 %

 Interest rate

 0.2
 %

 Expected life (years)

 0.7

 Dividend yield

 —
 %

 NOTES

 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 awards for the fiscal years 2023, 2022 and 2021 (no tax benefits were recognized):

 Schedule of Stock-based Compensation Expense

 2023

 2022

 2021

 Cost of product revenues

 $
 1,210,453

 $
 94,634

 $
 211,362

 Research and development

 861,324

 435,842

 576,193

 Selling, general and administrative

 1,803,496

 737,229

 3,629,867

 Total

 $

 $

 $

 Unrecognized
compensation expense for non-vested restricted common stock as of December 30, 2023 totaled $ 3.2 million and is expected to be recognized
over a weighted average period of approximately four years.

 7.
 Concentrations of Risk

 Ongoing
credit evaluations of customers' financial condition are performed and collateral, such as letters of credit, are generally not
required. Customer's accounts receivable balance as a percentage of total accounts receivable was as follows:

 Schedules of Concentration of Risk, by Risk Factor

 Percent of Gross Accounts Receivable

 Customer

 Collins Aerospace

 %

 %

 DRS Network & Imaging Systems, LLC

 %

 %

 Sales
to significant non-affiliated customers for fiscal years 2023, 2022 and 2021, as a percentage of total revenues, is as follows:

 Sales as a Percent of Total Revenue

 2023

 2022

 2021

 Customer

 Product Sales for Defense Customers in Total

 %

 %

 %

 DRS Network & Imaging Systems, LLC

 %

 %

 %

 Collins Aerospace

 %

 %

 %

 Funded Research and Development Contracts

 %

 %

 %

 Note:
The caption "Defense Customers in Total" excludes research and development contracts.

 NOTES

 8.
 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)

 2023

 2022

 2021

 2023

 2022

 2021

 Current

 State

 $
 —

 $
 —

 $
 1,000

 Foreign

 144,000

 128,000

 Total current provision

 144,000

 129,000

 Deferred

 Federal

 ( 3,457,000
)

 1,073,000

 ( 3,367,000
)

 State

 ( 1,063,000
)

 ( 1,561,000
)

 ( 928,000
)

 Foreign

 ( 281,000
)

 74,000

 318,000

 Change in valuation allowance

 4,801,000

 414,000

 3,977,000

 Total deferred provision

 —

 —

 —

 Total provision for income taxes

 $

 $
 144,000

 $
 129,000

 The
following table sets forth the changes in the Company's balance of unrecognized tax benefits for the year ended:

 Schedule of Unrecognized Tax Benefit

 Total

 Unrecognized tax benefits at December 25, 2021

 $
 394,000

 Gross increases—prior year tax positions

 —

 Unrecognized tax benefits at December 31, 2022

 394,000

 Gross increases—current year tax positions

 —

 Unrecognized tax benefits at December 30, 2023

 $
 394,000

 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 by the Company's income tax returns. The total amount of the Company's gross tax liability for tax positions
that may not be sustained under a 'more likely than not' threshold amounts to $ 0.4 million as of December 30, 2023 and December
31, 2022. The Company's policy regarding the classification of interest and penalties is to include these amounts as a component
of income tax expense. The total amount of accrued interest and penalties related to the Company's unrecognized tax benefits was
$ 1.0 million as of December 30, 2023 and December 31, 2022.

 Net
operating losses were not utilized in 2023, 2022 and 2021 to offset federal and state taxes.

 NOTES

 The
actual income tax provisions reported from operations are different from those which would have been computed by applying the federal
statutory tax rate to loss before income tax provision. A reconciliation of income tax provision from continuing operations as computed
at the U.S. federal statutory income tax rate to the provision for income tax benefit is as follows:

 Schedule of Effective Income Tax Rate Reconciliation

 2023

 2022

 2021

 2023

 2022

 2021

 Tax provision at federal statutory rates

 $
 ( 4,113,000
)

 $
 ( 4,029,000
)

 $
 ( 2,787,000
)

 Foreign deferred tax rate differential

 13,000

 ( 8,000
)

 ( 55,000
)

 Equity compensation awards

 450,000

 44,000

 ( 560,000
)

 Permanent items

 ( 79,000
)

 5,218,000

 481,000

 Increase in net state operating loss carryforwards

 ( 780,000
)

 ( 987,000
)

 ( 911,000
)

 Utilization of net operating losses for U.K. research and development refund

 —

 ( 24,000
)

 ( 134,000
)

 Provision to tax return adjustments and tax rate change

 ( 270,000
)

 ( 36,000
)

 ( 69,000
)

 Tax credits

 14,000

 ( 441,000
)

 ( 261,000
)

 Equity compensation

 —

 ( 188,000
)

 326,000

 Uncertain tax position for transfer pricing

 143,000

 128,000

 Other, net

 ( 36,000
)

 38,000

 ( 6,000
)

 Change in valuation allowance

 4,801,000

 414,000

 3,977,000

 Total provision

 $

 $
 144,000

 $
 129,000

 Pretax
foreign (loss) income from continuing operations was approximately $( 0.6) million for the fiscal year ended 2023, $ 0.4
million for fiscal year ended 2022, and $ 2.7
million for fiscal year ended 2021. Deferred income taxes are provided to recognize the effect of temporary differences between tax
and financial reporting. Deferred income tax assets and liabilities consist of the following:

 Schedule of Deferred Tax Assets and Liabilities

 2023

 2022

 2023

 2022

 Deferred tax liability:

 Foreign withholding liability

 $
 ( 471,000
)

 $
 ( 483,000
)

 Deferred tax assets:

 Federal net operating loss carryforwards

 49,213,000

 46,618,000

 State net operating loss carryforwards

 7,881,000

 7,381,000

 Foreign net operating loss carryforwards

 1,183,000

 942,000

 Equity awards

 37,000

 34,000

 Tax credits

 9,849,000

 9,854,000

 R&D expense amortization

 2,316,000

 1,900,000

 Property, plant and equipment

 598,000

 624,000

 Unrealized losses on investments

 2,292,000

 1,406,000

 Inventory reserves

 1,212,000

 1,119,000

 Other

 1,587,000

 1,492,000

 Net deferred tax assets

 75,697,000

 70,887,000

 Valuation allowance

 ( 76,168,000
)

 ( 71,370,000
)

 Deferred tax assets,
 net

 $
 ( 471,000
)

 $
 ( 483,000
)

 NOTES

 The
valuation allowance was approximately $ 76.2 million and $ 71.4 million at December 30, 2023 and December 31, 2022, respectively, primarily
driven by U.S. net operating loss carryforwards ("NOLs") and tax credits that the Company does not believe will ultimately
be realized.

 As
of December 30, 2023, the Company has available for tax purposes NOLs of $ 122.7 million expiring in 2023 through 2038 and $ 111.7 million
that have an unlimited carryover period. The Company has recognized a full valuation allowance on its net deferred tax assets as the
Company has concluded that such assets are not more likely than not to be realized.

 The
2017 Tax Act imposes a mandatory transition tax on accumulated foreign earnings and eliminates U.S. taxes on foreign subsidiary distributions.
As a result, earnings in foreign jurisdictions are available for distribution to the U.S. without incremental U.S. income taxes.

 Under
the provisions of Section 382, certain substantial changes in Kopin's ownership may limit in the future the amount of net operating
loss carryforwards that could be used annually to offset future taxable income and income tax liability.

 The
Company's income tax returns have not been examined by the Internal Revenue Service and are subject to examination for all years
since 2002. State income tax returns are generally subject to examination for a period of three to five years after filing of the respective
return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after
formal notification to the states.

 International
jurisdictions have statutes of limitations generally ranging from three to twenty years after filing of the respective return. Years
still open to examination by tax authorities in major jurisdictions include Korea (2011 onward), Japan (2011 onward), Hong Kong (2013
onward) and the United Kingdom (2016 onward). The Company is not currently under examination in these jurisdictions.

 9.
 Accrued Warranty

 The
Company warrants its products against defect for 12 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. In 2022, the Company increased its warranty reserves due to quality issues. Changes in the accrued warranty for fiscal
years ended 2023, 2022 and 2021 are as follows:

of Accrued Warranty

 December 25, 2021

 Fiscal Year Ended

 December 25, 2021

 Beginning balance

 $
 1,966,000

 $
 517,000

 $
 508,000

 Additions

 802,000

 2,329,000

 791,000

 Claim and reversals

 ( 608,000
)

 ( 880,000
)

 ( 782,000
)

 Ending Balance

 $
 2,160,000

 $
 1,966,000

 $
 517,000

 10.
 Employee Benefit Plan

 The
Company has an employee benefit plan pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended. In 2023, the plan allowed
employees to defer an amount of their annual compensation up to a current maximum of $ 22,500 if they are under the age of 50 and $ 30,000
if they are over the age of 50. The Company matches 50 % of all deferred compensation on the first 6 % of each employee's deferred
compensation. The amount charged to operations in connection with this plan was approximately $ 0.3 million in fiscal year 2023 and $ 0.4
million in fiscal years 2022 and 2021.

 NOTES

 11.
 Commitments

 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.

 12.
 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.

 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 ("the Court"), alleging that the Company breached a contract between it and BlueRadios concerning an alleged
joint venture between the Company and BlueRadios to design, develop and commercialize 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 alleges 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
October 11, 2016, the Company filed its Answer and Affirmative Defenses. The parties completed expert depositions on November 15, 2019.
On December 2, 2019, the Company filed a Motion for Partial Summary Judgment requesting the Court dismiss counts 2-7 in their entirety
and counts 1 and 8 in part. BlueRadios also filed a Motion for Partial Summary Judgment alleging it is the co-owner of U.S. Patent No.
8,909,296. Responses to the Motions for Partial Summary Judgment were filed on January 15, 2020, and replies were filed on February 19,
2020. On September 25, 2020, the Court denied BlueRadios' Motion for Partial Summary Judgment. On August 3, 2022, the Court granted
the Company's Motion for Partial Summary Judgment by dismissing counts 3, 6, 7, punitive damages under count 2, and count 8 as
it relates to patent applications, and denying the motion as it relates to counts 1, 4, and 5, and the remainder of counts 2 and 8. Additional
factual and expert discovery ordered by the Court has been completed. A trial date has been set by the Court for March 20, 2024. The
Company has not concluded a loss from this matter is probable; therefore, the Company has not recorded an accrual for litigation or claims related
to this matter as of December 30, 2023. The Company will continue to evaluate information as it becomes known and will
record an estimate for losses at the time or times when it is both probable that a loss has been incurred and the amount of the loss
is reasonably estimable.

 NOTES

 13.
 Segments and Disaggregation of Revenue

 Total
long-lived assets by country at December 30, 2023 and December 31, 2022 were:

 Schedule of Long-lived Assets by Country

 Total Long-lived Assets (in thousands)

 2023

 2022

 U.S.

 $
 4,424

 $
 4,604

 United Kingdom

 Total

 $
 4,668

 $
 5,000

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

 Total
revenue by geographical area for the fiscal years ended December 30, 2023, December 31, 2022 and December 25, 2021:

of Total
Revenue by Geographical Area

 2023

 2022

 2021

 (In thousands, except percentages)

 % of Total

 % of Total

 % of Total

 U.S.

 $
 35,092

 %

 $
 38,604

 %

 $
 32,461

 %

 Other Americas

 —
 %

 —
 %

 —

 —
 %

 Total Americas

 35,097

 %

 38,608

 %

 32,461

 %

 Asia-Pacific

 3,766

 %

 7,791

 %

 11,852

 %

 Europe

 1,531

 %

 1,002

 %

 1,353

 %

 Total Revenues

 $
 40,394

 %

 $
 47,401

 %

 $
 45,666

 %

 Total
revenue by display application for the fiscal years ended December 30, 2023, December 31, 2022 and December 25, 2021 was as follows:

of Segment Reporting Information, by Segment

 (In thousands)

 2023

 2022

 2021

 Defense

 $
 22,615

 $
 24,780

 $
 18,180

 Industrial

 2,736

 6,136

 9,710

 Consumer

 1,497

 1,871

 R&D

 13,455

 14,357

 14,669

 License and royalties

 1,002

 1,115

 Other

 Total Revenues

 $
 40,394

 $
 47,401

 $
 45,666

 NOTES

 14.
 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, Inc. ("RealWear") have entered into agreements where the Company has 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 and will receive royalties of future product sales. In May 2019, the Company
signed an additional agreement to license certain intellectual property to Realwear for a $ 3.5 million license fee and additional sales-based
royalties. Of the $ 3.5 million license fee, $ 2.5 million was paid upon signing of the license agreement and the other $ 1.0 million was
paid in quarterly installments of $ 0.25 million. See Note 5 for a description of the Company's
investments in RealWear. As of December 30, 2023, the Company owned approximately 3.3 % of RealWear.

 On
September 30, 2019, the Company entered into an Asset Purchase Agreement (the "Solos Purchase Agreement") with Solos
Technology Limited ("Solos Technology"). Pursuant to the Solos Purchase Agreement, the Company sold and licensed to
Solos Technology certain assets of its Solos TM ("Solos") product line and Whisper TM Audio
("Whisper") technology. As consideration for the transaction the Company received 1,172,000
common shares representing a 20.0 %
equity stake in Solos Technology's parent company, Solos Incorporation ("Solos Inc."). In addition, the Company
has agreed to reimburse Solos Technology for sales support provided. Solos Technology has agreed to reimburse the Company for the
employee's time spent on Solos development. As of December 30, 2023, and December 31, 2022, the Company had less than $ 10,000
of receivables outstanding from Solos Technology and had payables of less than $ 10,000
to Solos Technology.

 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 30, 2023.

 As
of December 30, 2023, the Company's former Chairman and founder of Lightning Silicon Technology, Inc., Dr. John C.C. Fan, has an individual ownership interest of 11.1 %
( 17.7 %
fully diluted) of Solos Inc. Two of Dr. Fan's family members and a family trust have also invested in Solos Inc., and
collectively hold a 37.5 %
( 57.4 %
fully diluted) ownership interest in Solos Inc.

 During
fiscal years 2023, 2022 and 2021, the Company had the following transactions with related parties:

of Revenue with Related Parties

 2023

 2022

 2021

 Purchases

 Purchases

 Purchases

 RealWear, Inc.

 $
 1,000,466

 $
 —

 $
 1,191,988

 $
 —

 $
 3,762,638

 $
 —

 HMDmd, Inc.

 852,175

 —

 473,294

 —

 656,805

 —

 Lightning Silicon Technology, Inc.

 35,013

 546,378

 —

 —

 —

 —

 $
 1,887,654

 $
 546,378

 $
 1,665,282

 $
 —

 $
 4,419,443

 $
 —

 At
December 30, 2023 and December 31, 2022, the Company had the following receivables and payables with related parties:

 Receivables

 Payables

 Receivables

 Payables

 RealWear, Inc.

 $
 94,902

 $
 —

 $
 171,518

 $
 —

 Solos Technology

 —

 —

 2,248

 —

 HMDmd, Inc.

 15,000

 —

 151,340

 —

 Lightning Silicon Technology, Inc.

 35,013

 97,600

 —

 —

 $
 144,915

 $
 97,600

 $
 325,106

 $
 —

 15.
 Subsequent Events

 The Company has evaluated subsequent events or transactions that have occurred after the consolidated balance sheet
date of December 30, 2023 through the date of this filing of the consolidated financial statements with the SEC on this Annual Report
on Form 10-K and determined that, except as disclosed, there have been no material subsequent events that have occurred since December
30, 2023 through the date of this filing that would require recognition or disclosure in our consolidated financial statements.

 16.
 Valuation and Qualifying Accounts

 The
following table sets forth activity in Kopin's allowance for credit losses:

 Schedule of Valuation and Qualifying Accounts

 Fiscal year ended:

 Balance at
 Beginning
 of Year

 Additions
 Charged
 to

 Deductions
 from
 Reserve

 Balance at
 End of
 Year

 December 25 2021

 $
 175,000

 $
 55,000

 $
 ( 80,000
)

 $
 150,000

 150,000

 322,000

 ( 169,000
)

 303,000

 $
 303,000

 $
 789,000

 $
 ( 67,000
)

 $
 1,025,000

TO EXHIBITS

 Exhibits

 3.1

 Amended
 and Restated Certificate of Incorporation filed as an exhibit to Registration Statement on Form S-1, File No. 33-57450, and incorporated
 herein by reference.

 3.2

 Amendment to Certificate of Incorporation filed as an exhibit to Quarterly Report on Form 10-Q for the quarterly period ended July 1, 2000 and incorporated herein by reference.

 3.3

 Amendment to Certificate of Incorporation filed as an exhibit to Quarterly Report on Form 10-Q for the quarterly period ended July 1, 2000 and incorporated herein by reference.

 3.4

 Sixth Amended and Restated By-laws filed as an exhibit to Current Report on Form 8-K filed on April 12, 2019 and incorporated herein by reference.

 4.1

 Specimen
 Certificate of Common Stock filed as an exhibit to Registration Statement on Form S-1, File No. 33-45853, and incorporated herein
 by reference.

 4.2

 Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 filed as an exhibit to Annual Report on Form 10-K for the fiscal year ended December 25, 2021 and incorporated herein by reference.

 10.1

 Form
 of Employee Agreement with Respect to Inventions and Proprietary Information filed as an exhibit to Registration Statement on Form
 S-1, File No. 33-45853, and incorporated herein by reference.

 10.8*

 Form
 of Key Employee Stock Purchase Agreement filed as an exhibit to Registration Statement on Form S-1, File No. 33-45853, and incorporated
 herein by reference. *

 10.9

 License
 Agreement by and between the Company and Massachusetts Institute of Technology dated April 22, 1985, as amended, filed as an exhibit
 to Registration Statement on Form S-1, File No. 33-45853, and incorporated herein by reference.

 10.10

 Facility
 Lease, by and between the Company and Massachusetts Technology Park Corporation, dated October 15, 1993 filed as an exhibit to Annual
 Report on Form 10-K for the fiscal year ended December 31, 1993 and incorporated herein by reference.

 10.11*

 Kopin Corporation Form of Stock Option Agreement under 2001 and 2010 Equity Incentive Plans filed as an exhibit to Annual Report on Form 10-K for the fiscal year ended December 25, 2004 and incorporated herein by reference. *

 10.12*

 Kopin Corporation 2001 and 2010 Equity Incentive Plan Form of Restricted Stock Purchase Agreement filed as an exhibit to Annual Report on Form 10-K for the fiscal year ended December 25, 2004 and incorporated herein by reference. *

 10.13*

 Kopin Corporation Fiscal Year 2012 Incentive Bonus Plan filed as an exhibit to Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and incorporated herein by reference. *

 10.14

 Kopin Corporation 2010 Equity Incentive Plan filed with the Company's Definitive Proxy Statement on Schedule 14 filed as of April 5, 2013 and incorporated by reference herein.

 10.15*

 Offer Letter, dated January 17, 2019, by and between Kopin Corporation and Paul Baker filed as an exhibit to the Current Report on Form 8-K filed on January 22, 2019 and incorporated by reference herein.

 10.16

 Asset Purchase Agreement, dated September 30, 2019, by and between Kopin Corporation, Kopin Display Corporation and Solos Technology Limited.

 10.17*

 Kopin Corporation 2020 Equity Incentive Plan filed as an exhibit to Current Form on 8-K on May 20, 2020 and incorporated by reference herein.

 10.18*

 Tenth Amended and Restated Employment Agreement between the Company and Dr. John C.C. Fan, dated as of December 31, 2020, filed as an exhibit to the Annual Report on Form 10-K for the fiscal year ended December 25, 2021 and incorporated herein by reference

 10.19*

 Letter Agreement between Kopin Corporation and Michael Murray, dated July 14, 2022, filed as an exhibit to the Quarterly Report on Form 10-Q for the quarterly period ended September 24, 2022 and incorporated by reference herein.*

 10.20*

 Amendment to Employment Agreement between Kopin Corporation and John C. C. Fan, dated September 5, 2022, filed as an exhibit to the Quarterly Report on Form 10-Q for the quarterly period ended September 24, 2022 and incorporated by reference herein.*

 21.1#

 Subsidiaries of Kopin Corporation

 23.1#

 Consent of Independent Registered Public Accounting Firm - RSM US LLP

 31.1#

 Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2#

 Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1#

 Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 32.2#

 Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 97.1#

 Kopin Corporation Compensation Clawback Policy

 101.0

 The
 following materials from the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2023, formatted in
 (iii) Consolidated Statements of Comprehensive Loss, (iv) Consolidated Statements of Stockholder's Equity, (v) Consolidated
 Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text.

 The
 and contained in Exhibit 101.

 #

 Filed herewith

 *

 Management
 contract or compensatory plan required to be filed as an Exhibit to this Form 10-K.

 Portions
 of this exhibit and the schedules thereto, marked by brackets, have been omitted pursuant to Item 601(b)(10) of Regulation S-K.

 Item
 16.

 Form
 10-K Summary

 Not
applicable.

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) 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.

 March

 KOPIN

 By:

 /s/
 MICHAEL MURRAY

 Michael
 Murray

 President,
 Chief Executive Officer

 (Principal
 Executive Officer)

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/
 JAMES BREWINGTON

 Chairman
 of the Board

 James
 Brewington

 March

 /s/
 MICHAEL MURRAY

 Chief
 Executive Officer, President and Director (Principal Executive Officer)

 Michael
 Murray

 March

 /s/
 JOHN C.C. FAN

 John
 C.C. Fan

 March

 /s/
 JILL AVERY

 Jill
 Avery

 March

 /s/
 CHI CHIA HSIEH

 Chi
 Chia Hsieh

 March

 /s/
 SCOTT L. ANCHIN

 Scott
 L. Anchin

 March

 /s/
 DAVID NIEUWSMA

 David
 Nieuwsma

 March

 /s/
 RICHARD A. SNEIDER

 Treasurer
 and Chief Financial Officer

 Richard
 A. Sneider

 (Principal
 Financial and Accounting Officer)

 March