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STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION
 6 Months Ended
Jun. 28, 2025
Equity [Abstract]  
STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

7. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

 

Registered sale of equity securities

 

On September 23, 2024, the Company sold 37,550,000 shares of common stock and pre-funded warrants to purchase up to 4,000,000 shares of common stock at a public offering price of $0.64 per pre-funded warrant and received gross proceeds of $27.0 million before deducting underwriting discounts and offering expenses paid by the Company of $1.8 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. On September 30, 2024, the Company sold 2,405,000 shares of common stock and received gross proceeds of approximately $1.6 million.

 

During the three months ended March 30, 2024, the Company sold 3,080,000 shares of common stock for gross proceeds of $7,466,755 (average of $2.42 per share) before deducting broker expenses paid by the Company of approximately $0.2 million, pursuant to the Company’s then effective At-The-Market Equity Offering Sales Agreement, dated as of March 5, 2021 (the “ATM Agreement”) with Stifel, Nicolaus & Company, Incorporated (“Stifel”), as agent. The ATM Agreement terminated in the three months ended March 30, 2024.

 

On June 6, 2024, the Company’s shareholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Charter”) to increase the number of authorized shares of the Company’s common stock, par value $0.01 per share, from 150,000,000 shares to 200,000,000 shares. On June 26, 2025, the Company’s shareholders approved an amendment to the Charter to increase the number of authorized shares of the Company’s common stock, par value $0.01 per share, from 200,000,000 shares to 275,000,000 shares.

 

As of June 28, 2025 and December 28, 2024, the Company had 10,000,000 pre-funded warrants outstanding with a $0.01 per share exercise price.

 

Non-Vested Restricted Common Stock

 

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 fulfil 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. 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 requisite 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.

 

Restricted stock activity for the six month period ended June 28, 2025 was as follows:

 

   Shares   Weighted Average
Grant Fair Value		   Fair
Value		   Intrinsic Value 
Non-vested at December 28, 2024   4,833,611   $1.19   $5,757,391   $6,718,720 
Granted   2,797,864    1.37   $3,833,074    - 
Forfeited   (639,376)   1.89   $(1,208,421)   - 
Vested   (577,845)   1.61   $(930,330)   - 
Non-vested at June 28, 2025   6,414,254   $1.16   $7,451,714   $9,942,094 
Expected to vest   6,414,254                

 

 

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 and stock options awards for the three and six months ended June 28, 2025 and June 29, 2024 (no tax benefits were recognized):

 

   Three Months
Ended		   Three Months
Ended		   Six Months
Ended		   Six Months
Ended		 
   June 28, 2025   June 29, 2024   June 28, 2025   June 29, 2024 
Cost of product revenues  $86,569   $268,318   $226,006   $488,924 
Research and development   124,345    117,086    242,065    260,909 
Selling, general and administrative   536,803    291,014    1,054,038    661,513 
Total  $747,717   $676,418   $1,522,109   $1,411,346 

 

Unrecognized compensation expense for non-vested restricted common stock as of June 28, 2025 totaled $7.5 million and is expected to be recognized over a weighted average period of approximately two years.

 

Stock Options

 

During the three months ended March 29, 2025, an option award for 591,366 shares of the Company’s common stock was granted to the Chief Executive Officer. These options have a strike price of $1.76 and vest over a 4 year period. During the three and six months ended June 28, 2025, the Company recorded incremental stock-based compensation of less than $0.1 million, as a result of the granting of stock option awards. The remaining unrecognized compensation cost of is expected to be recognized over the remaining vesting period. The fair value of this options award was estimated using the Black-Scholes model using the following assumptions and had the following fair values:

 

   Three Months
Ended		   Six months
ended		 
   June 28, 2025   June 28, 2025 
Average risk-free interest rate   4.54%   4.54%
Expected dividend yield   None    None 
Expected life (average, in years)   8.00    8.00 
Expected volatility   85%   85%
Weighted average exercise price  $1.76   $1.76 
Weighted average fair value  $1.16   $1.16 

 

The Company’s 2025 average expected volatility and average expected life is based on the average of the Company’s historical information. The risk-free rate is based on the rate of U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of option grants. The Company has paid no dividends on its common stock in the past and does not anticipate paying any dividends in the future.

 

A summary of stock option activity for the period ended June 28, 2025 is as follows:

 

   Number of Options   Weighted Average Exercise Price   Intrinsic Value 
Outstanding as of December 28, 2024   —   $—   $— 
Granted   591,366   $1.76      
Outstanding as of June 28, 2025   591,366   $1.76   $— 
Options exercisable as of December 28, 2024   —   $—   $— 
Options exercisable as of June 28, 2025   591,366   $1.76   $— 

 

On August 8, 2025, subject to closing conditions and regulatory approval, Kopin entered into certain strategic agreements (collectively, the “Agreements”) for an aggregate of $15 million strategic investment from Theon International Plc (“Theon”). Under the terms of the Agreements, Theon will acquire a 49% interest in Kopin’s subsidiary, Kopin Europe Ltd. for $8.0 million and the parties will enter into a licensing and development agreement and funding agreements relating to the joint development of military products. In addition, upon closing, Theon will purchase $7.0 million worth of shares of Series A Convertible Preferred Stock, par value $0.01 per share, of Kopin (the “Preferred Stock”). Each share of the Preferred Stock is convertible into shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”) at an initial fixed conversion price of $3.00 per share for Series A Convertible Preferred Stock of the Company. Kopin will have the ability to force the conversion of the Preferred Stock into common stock once Kopin’s common stock trades at $4.50 per share or higher for 10 Trading Days within a 30 consecutive Trading Day period, as defined in the agreements. The Preferred Stock will carry an annual dividend of at the base rate dividend rate of 4%, payable in cash and stock.