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Related Party Transactions
 12 Months Ended
Dec. 28, 2024
Related Party Transactions [Abstract]  
Related Party Transactions

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 have entered into agreements where the Company have agreed to supply display modules to RealWear, and license certain intellectual property to RealWear. In conjunction with these agreements the Company received an equity interest in RealWear, one-time $1.5 million license fees 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 28, 2024, the Company owned approximately 1.8% 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 SolosTM (“Solos”) product line and WhisperTM 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.”). As of December 28, 2024, and December 30, 2023, the Company had less than $30,000 and $10,000, respectively, of receivables outstanding from Solos Technology and had payables of less than $10,000 to Solos Technology.

 

As of December 28, 2024, the Company’s former Chairman and founder of Solos Inc., Dr. John C.C. Fan, has an investment in Solos Inc.

 

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 28, 2024.

 

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 also receives a royalty based on unit sales of products that utilize the technology licensed.

 

As of December 28, 2024, the Company’s former Chairman and founder of Lightning Silicon Technology, Inc., Dr. John C.C. Fan, has an individual ownership interest of Lightning Silicon Technology Inc.

 

On September 5, 2022, John C.C. Fan, the Company’s then President and Chief Executive Officer and Chairman of the Company’s Board of Directors, notified the Company of his resignation as President and CEO effective September 6, 2022. Under the terms of his previous employment agreement Dr. Fan received $750,000 of severance payments for the fiscal year 2024 and 2023. In addition, Dr. Fan received $40,000 for medical benefits for fiscal year 2024 and 2023, and he (or his spouse) will receive $40,000 through 2032.

 

During fiscal years 2024, 2023 and 2022, the Company had the following transactions with related parties:

  

   2024   2023   2022 
   Revenue   Purchases   Revenue   Purchases   Revenue   Purchases 
RealWear, Inc.  $406,878   $10,550   $1,000,466   $—   $1,191,988   $— 
HMDmd, Inc.   603,109    —    852,175    —    473,294    — 
Vuzix Corp   —    11,905    —    —    —    — 
Solos Technology   29,132    —    —    —    —    — 
Lightning Silicon Technology, Inc.   5,218    353,858    35,013    546,378    —    — 
   $1,044,337   $376,313   $1,887,654   $546,378   $1,665,282   $— 

 

At December 28, 2024 and December 30, 2023, the Company had the following receivables and payables with related parties:

 

   December 28, 2024   December 30, 2023 
   Receivables   Payables   Receivables   Payables 
RealWear, Inc.  $94,884   $—   $94,902   $— 
Solos Technology   29,132    —    —    — 
HMDmd, Inc.   279,150    —    15,000    — 
Lightning Silicon Technology, Inc.   1,228    72,500    35,013    97,600 
   $404,394   $72,500   $144,915   $97,600