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RELATED PARTY TRANSACTIONS
 9 Months Ended
Sep. 27, 2025
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

15. RELATED PARTY TRANSACTIONS

 

The Company may from time to time enter into agreements with stockholders, affiliates and other companies engaged in certain aspects of the display, electronics, optical and software industries as part of its 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 to enhance its product offering.

 

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 September 27, 2025 and December 28, 2024, the Company had $0 and approximately $30,000, respectively, of receivables outstanding from 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 September 27, 2025 and 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. In the third quarter of 2025, LST ceased operations.

 

As of September 27, 2025, 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 6, 2022, John C.C. Fan, the Company’s then President and Chief Executive Officer and Chairman of the Company’s Board of Directors, resigned as President and CEO. Under the terms of his previous employment agreement Dr. Fan received $750,000 of severance payments for the fiscal years 2024 and 2023. In addition, Dr. Fan has received $40,000 for medical benefits for each fiscal year since 2023, and he (or his spouse) will receive $40,000 through 2032.

 

During the three and nine months ended September 27, 2025 and September 28, 2024, the Company had the following transactions with related parties:

 

   Three Months Ended 
   September 27, 2025   September 28, 2024 
   Sales   Purchases   Sales   Purchases 
RealWear, Inc.  $68,754   $—   $94,854   $— 
HMDmd, Inc.   1,370    —    76,918    — 
Solos Technology   —    —    33,288    — 
Lightning Silicon Technology, Inc.   —    65,000    924    6,650 
   $70,124   $65,000   $205,984   $6,650 

 

   Nine Months Ended 
   September 27, 2025   September 28, 2024 
   Sales   Purchases   Sales   Purchases 
RealWear, Inc.  $189,216   $—   $311,994   $10,550 
HMDmd, Inc.   700,955    —    299,177    — 
Vuzix Corp   —    —    —    11,905 
Solos Technology   —    —    33,288    — 
Lightning Silicon Technology, Inc.   —    116,800    3,158    170,850 
   $890,171   $116,800   $647,617   $193,305 

 

At September 27, 2025 and December 28, 2024, the Company had the following receivables and payables with related parties:

 

   September 27, 2025   December 28, 2024 
   Receivables   Payables   Receivables   Payables 
RealWear, Inc.  $68,754   $—   $94,884   $— 
HMDmd, Inc.   —    —    279,150    — 
Solos Technology   —    —    29,132    — 
Lightning Silicon Technology, Inc.   —    —    1,228    72,500 
   $68,754   $—   $404,394   $72,500 

 

16. SUBSEQUENT EVENTS

 

On September 29, 2025, the Company announced that it has entered into a securities purchase agreement (the “Purchase Agreement”) for a private investment in public equity financing (the “PIPE”) for 19,545,950 shares of its common stock, par value $0.01 per share (the “Shares”). The net proceeds to the Company from the offering are $38.1 million, after deducting placement agent fees and commissions and estimated offering expenses payable by the Company. The transaction was consummated on September 30, 2025.

 

As described in Note 14. Litigation, on September 5, 2025, a post-trial order was entered in the U.S. District Court for the District of Colorado in the matter of BlueRadios, Inc. v. Kopin Corporation, Inc. finding for the plaintiff, BlueRadios, Inc. and awarding approximately $19.7 million in damages but denying a permanent injunction and prejudgment interest. In the second quarter of 2024, the Company had estimated and accrued $24.8 million in probable and reasonably estimable damages for this matter. As a result of the post-trial order, the Company reduced the accrual to $19.7 million and recognized a benefit of $5.1 million for the reduction in the accrual in the condensed consolidated Statements of Operations for the three and nine months ended September 27, 2025. On October 2, 2025, the Company posted a supersedeas bond for the amount of $23.0 million which consisted of the $19.7 million judgement, legal expenses, and interest that would accrue over the expected term of the appeal. To post the bond the Company entered into loan agreements (the “Agreements”) with its bank which provides the bank with a security interest in the $23.0 million the Company deposited with the bank. This $23.0 million is to be classified as Restricted Cash. The bank then issued a Letter of Credit (LOC) to a surety company who then issued the bond to the court. The Agreement provides for standard representations and warranties and allows the bank to use the $23.0 million to satisfy the LOC in the event the LOC is called. As of September 27, 2025, the Company has accrued $19.7 million for the judgment within Accrued litigation liability and has accrued approximately $0.1 million in related interest within Other accrued liabilities. On October 7, 2025, the Company filed an appeal of the $19.7 million judgement against the Company in the matter of Blue Radios Inc. v. Kopin Corporation.

 

On October 16, 2025, a $15 million strategic investment from Theon International Plc (“Theon”) had been completed. Under the terms of the Agreements, Theon acquired a 49% interest in Kopin’s subsidiary, Kopin Europe Ltd. for $8.0 million and the parties entered into a licensing and development agreement and funding agreements relating to the joint development of military products. In addition, Theon purchased 1,000 shares of Series A Convertible Preferred Stock of the Company, par value $0.01 per share (the “Preferred Stock”), for $7,000 per share for total proceeds of $7.0 million. 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, pursuant to the terms of the Certificate of Designation for Series A Convertible Preferred Stock of the Company (the “Certificate of Designations”). Kopin will have the ability to force the conversion of the preferred stock into common stock once Kopin’s common stock trades at $5.50 per share or higher for 10 Trading Days (as defined in the Certificate of Designation) within a 30 consecutive Trading Day period. The Preferred Stock will carry an annual dividend of at the base rate dividend rate of 4%, 2% payable in cash and 2% payable in stock.