Forward Looking Statements This Quarterly Report on Form 10-Q 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 our Annual Report on Form 10-K for the fiscal year ended December 27, 2025, as amended. 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 recruit and 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, changes imposed by the new U.S. presidential administration, 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. Overview We are a leading developer, manufacturer and seller of miniature displays and optical lenses (our “components”) for sale as individual displays, components, modules or higher-level subassemblies. We also license our intellectual property through technology license agreements. Our component products are used in highly demanding high-resolution portable defense, enterprise and consumer electronic applications, training and simulation equipment and 3D metrology equipment. Our products enable our customers to develop and market an improved generation of products for these target applications. The following discussion should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 27, 2025, as amended and our unaudited condensed consolidated financial statements included in this Form 10-Q. 27 Results of Operations Our interim period results of operations and period-to-period comparisons of such results may not be indicative of our future operating results. Additionally, we use a fiscal calendar that may result in differences in the number of workdays in the current and comparable prior interim periods and could affect period-to-period comparisons. The following discussion of comparative results of operations among periods should be viewed in this context. Revenues. For the three and six months ended June 27, 2026 and June 28, 2025, our revenues by display application, which include product sales and amounts earned from research and development contracts (“R&D”), were as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended (In thousands) June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Defense $ 7,311 $ 6,222 $ 12,621 $ 14,683 Industrial 20 1,031 68 1,423 Medical 309 213 326 572 Consumer and other product 0 32 50 50 Net product revenues 7,640 7,498 13,065 16,728 R&D 2,168 908 3,459 2,145 License and royalties 56 49 121 120 ASC 606 revenues 9,864 8,455 16,645 18,993 Grant 2,599 — 6,040 — Collaboration 271 — 601 — Non ASC 606 revenues 2,870 — 6,641 — Total Revenues $ 12,734 $ 8,455 $ 23,286 $ 18,993 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 the three months ended June 27, 2026 as compared to the three months ended June 28, 2025, primarily due to higher production volumes of our products for thermal weapon sight applications and liquid crystal displays. The decrease in Defense applications revenues in the six months ended June 27, 2026 as compared to the six months ended June 28, 2025 was primarily related to a decrease in revenue from products used in thermal weapon sights and liquid crystal displays. Industrial 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 Asia-based contract manufacturers who use the 3D metrology machines for quality control purposes. The industrial applications market has seen new entrants over the last few years, which has led to increased price competition. We have introduced lower priced products to compete with our competitors, but we expect this trend will continue and hence we are focusing our product and selling efforts on other more attractive market segments. Sales of our displays for Consumer applications are primarily for use in thermal imaging products, recreational rifle and hand-held scopes. R&D revenues increased in the three and six months ended June 27, 2026 as compared to the three and six months ended June 28, 2025 primarily due to the Company’s progress on the Phase 2 Off-the-Visor Heads-Up Display program with the U.S. Army and due to the start of the development program with Fabric.AI entered into on April 27, 2026 to develop and commercialize certain GPU to GPU connectivity technologies. These contracts typically reimburse us for direct costs and allocated overhead and selling, general and administrative costs and in some cases profit. 28 The slight increase in license and royalty revenue in the three months ended June 27, 2026 as compared to the three months ended June 28, 2025 is due to a increase in royalties earned under IP license agreements for industrial wearable headsets. Grant revenues increased in the three and six months ended June 27, 2026 as compared to the three and six months ended June 28, 2025 in connection with the Company’s government grant, awarded in the fourth quarter of 2025, for the development of ultra-bright, full color MicroLED displays optimized for ground soldier augmented reality applications. Collaboration revenues increased in the three and six months ended June 27, 2026 as compared to the three and six months ended June 28, 2025 as a result of the Company’s strategic partnership, initiated in the fourth quarter of 2025, to develop the next generation clip on with augmented reality and thermal integration capabilities based on the Company’s micro-display technology. 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 the three and six months ended June 27, 2026 and June 28, 2025 were as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended (In thousands, except for percentages) June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Cost of product revenues $ 6,587 $ 7,072 $ 12,197 $ 14,701 Cost of product revenues as a % of net product revenues 86 % 94 % 93 % 88 % The decrease in cost of product revenues as a percentage of net product revenues for the three months ended June 27, 2026, compared to the three months ended June 28, 2025, was primarily attributable to product mix. Cost of product revenues as a percentage of net product revenues increased during the six months ended June 27, 2026 as compared to the six months ended June 28, 2025 primarily attributable to reduced production efficiency during the first three months of 2026. Research and Development. R&D expenses are incurred in support of internal display development programs and 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 overhead. In fiscal year 2026, we expect our R&D expenditures to be related to our display products, overlay weapon sights and OLED display technologies. R&D expenses for the three and six months ended June 27, 2026 and June 28, 2025 were as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended (In thousands) June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Funded $ 3,327 $ 464 $ 7,133 $ 1,103 Internal 1,197 1,481 2,303 2,959 Total research and development expense $ 4,524 $ 1,945 $ 9,436 $ 4,062 Funded R&D expense for the three and six months ended June 27, 2026 increased as compared to the three and six months ended June 28, 2025 primarily due to the Company’s government grant for the development of ultra-bright, full color MicroLED displays optimized for ground soldier augmented reality applications. Funded R&D expense includes costs related to grant and collaboration income. Internal R&D expense decreased for the three and six month ended June 27, 2026 as compared to the three and six months ended June 28, 2025 primarily due to lower labor hours spent on internal research and development activities. 29 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 three and six months ended June 27, 2026 and June 28, 2025 were as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended (In thousands, except for percentages) June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Selling, general and administration expense $ 5,127 $ 4,899 $ 11,144 $ 9,600 Selling, general and administration expense as a % of revenues 40 % 58 % 48 % 51 % SG&A increased for the three and six months ended June 27, 2026 as compared to the three and six months ended June 28, 2025 primarily due to increases in professional fees and accrued performance-based compensation. Other Income, net. Other income, net, is primarily composed of interest income, foreign currency transactions, gains on fair value recording of investments and other non-operating income items. Other income, net, for the three and six months ended June 27, 2026 and June 28, 2025 were as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended (In thousands) June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Other income, net $ 2,245 $ 347 $ 4,536 $ 1,193 During the three and six months ended June 27, 2026, we had gains on investments of approximately $2.3 million and $4.6 million, respectively. During the three months ended June 27, 2026, interest income decreased approximately $0.2 million compared to the three months ended June 27, 2025. Tax Provision. We recorded a benefit for income taxes of approximately $2.1 million in the three months ended June 27, 2026 due to the expiration of the statute of limitation of an uncertain tax position. We recorded a provision for income taxes of approximately $0.1 million for the three and six months ended June 28, 2025. Net Income (Loss). We had a net income of $0.8 million and a net loss of $2.9 million during the three and six months ended June 27, 2026, respectively compared to net losses of $5.2 million and $8.3 million during the three and six months ended June 28, 2025. The decrease in the net loss during the three months ended June 27, 2026 compared to the three months ended June 28, 2025 was due to gains on investments of $2.3 million, a $2.1 million tax credit, and increase in total revenues. The decrease in the net loss during the six months ended June 27, 2026 compared to the six months ended June 28, 2025 was primarily due to a gain on investments. 30 Liquidity and Capital Resources On June 27, 2026 and December 27, 2025, we had cash and cash equivalents, including restricted cash, and marketable securities of $50.3 million and working capital, excluding restricted cash, of $17.5 million compared to $61.6 million and $33.6 million, respectively. Six Months Ended Six Months Ended June 27, 2026 June 28, 2025 Net cash used for operating activities $ (5,142,502 ) $ (7,572,770 ) Net cash (used in) provided by investing activities (5,111,818 ) 17,867,407 Net cash used in by financing activities (1,095,112 ) (89,657 ) Effect of exchange rate changes on cash 1,055 4,210 (Decrease) increase in cash and equivalents $ (11,348,377 ) $ 10,209,190 For the six months ended June 27, 2026 and June 28, 2025, cash used in operating activities consisted primarily of a net losses from operations of $2.9 million and $8.3 million respectively. For the six months ended June 27, 2026, net cash used in investing activities in the amount of $5.1 million consisted of capital expenditures. For the six months ended June 28, 2025 cash provided by investing activities was primarily related to net proceeds from the sale of marketable securities. We expect that net cash used for or provided by operating activities to fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results and changes in components of working capital. Our cash and cash equivalents and liquidity could be adversely affected by any amounts that become payable in connection with any adverse results from any litigation we are, or may become, involved in. The change in financing activities was the settlements of restricted stock for tax witholding obligations for $1.1 million. Equity offerings On September 29, 2025, the Company 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 were approximately $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. On October 16, 2025, the Company completed a $15 million strategic investment with Theon 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 $7.0 million worth of shares of Series A Convertible Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”). Each share of the Preferred Stock was 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”). The Company had the ability to force the conversion of the preferred stock into common stock once the Company’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 carried an annual dividend of at the base rate dividend rate of 4%, 2% payable in cash and 2% payable in stock. With the close of this transaction, Kopin Europe Ltd. was deconsolidated from the Company’s consolidated financial statements. The consolidated statement of operations therefore includes nine months and sixteen days of activity related to Kopin Europe Ltd. The assets and liabilities of Kopin Europe Ltd. are no longer included within the Company’s consolidated balance sheets. Any discussions related to results, operations, and accounting policies associated with Kopin Europe Ltd. are referring to the current period through this transaction and prior periods as consolidated. On May 28, 2026 Theon exercised its conversion right under the Certificate of Designation to convert all 1,000 outstanding shares of Series A Convertible Preferred stock into shares of Common Stock. The conversion was effected at a conversion price of $3.00 per share resulting in the issuance of 2,380,973 shares of the Company’s common stock to Theon. The Company’s Series A Convertible Preferred stock has been retired and no shares of Series A Convertible Preferred Stock are outstanding. 31 The domestic locations balance of $50.3 million and $61.6 million for the period ended June 27, 2026 and fiscal year ended 2025 includes $25.4 million and $25.3 million of restricted cash as of June 27, 2026 and December 27, 2025 respectively, that is not available for current operating use. The manufacturing operations at our Korean facility, Kowon, have ceased and Kowon was liquidated at fiscal year ended 2018. As of December 27, 2025 we had recorded deferred tax liabilities for any additional withholding tax that may be due to the Korean government upon Kowon’s final tax return acceptance. The statue of limitations expired during the three months ended June 27, 2026 and reversed the deferred tax liability of $2.1 million as of June 27, 2026. We expect to expend between $5.0 million and $6.5 million on capital expenditures in the second half of 2026. We had net income of $0.8 million and a net loss of $2.9 million for the three and six months ended June 27, 2026 and a net loss of $2.6 million in fiscal year 2025, and net cash outflows used in operations of $5.1 million and $15.5 million for the six months ended June 27, 2026 and for the fiscal year ended 2025, respectively. Moreover, the Company has posted a bond to satisfy the court’s verdict of $19.7 million in damages and anticipated accrued interest in the matter of BlueRadios vs. Kopin Corporation, Inc. should the Company’s appeal be unsuccessful (refer to Note 17 of our consolidated financial statements for more information). As of June 27, 2026, the Company had $24.9 million of cash and cash equivalents (excluding restricted cash), which the Company believes is sufficient to support its operations and satisfy its obligations for at least the next twelve months from the issuance of these financial statements. We estimate we will have sufficient liquidity to fund operations into the fourth quarter of 2027. 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 financing, 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. Critical Accounting Estimates Our critical accounting estimates are described in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition” of our Annual Report on Form 10-K for the fiscal year ended December 27, 2025. Item