Kopin Corporation (Nasdaq: $KOPN) Stock Hub 2026: Neural I/o, Sentinel FPV And The $19.7 Million Judgment On Appeal

01 What Kopin Is In August 2026

Kopin Corporation makes the optical parts that sit between a sensor and a human eye, or between one
processor and another. It trades on Nasdaq under the symbol KOPN, it is incorporated in Delaware, it
runs from Westborough, Massachusetts, and its fiscal year ends on the last Saturday of December,
which for 2025 was December 27. The most recent audited accounts are the annual report for that year,
filed on April 13, 2026. The most recent numbers of any kind are in the quarterly report for the
three months to June 27, 2026, filed on August 11, 2026.

The business as it stands in August 2026 has four parts, and only one of them currently pays the
bills. The first is the legacy display and optics business: microdisplays, display modules, eyepiece
and projection assemblies and head-mounted systems built on liquid crystal, OLED and MicroLED, sold
mostly into defense programmes. The second is a colour MicroLED development programme funded by a
United States government award, aimed at ground soldier augmented reality. The third is Sentinel
FPV, a first-person-view drone product launched in 2026 into a market the American government is
actively trying to build. The fourth, and the one that has moved the share price, is Neural I/o, an
attempt to use programmable MicroLED pixels as optical transceivers between GPUs in artificial
intelligence data centres, developed with a partner that is funding it.

The financial shape of that is unusual. In the second quarter of 2026 Kopin reported total revenues
of $12.73 million, up 50.6 per cent on the $8.45 million of a year earlier, and a net profit of
$0.83 million, its first positive quarter of 2026. It also reported a loss from operations of
$3.50 million. Both are true at the same time: the profit came from $2.34 million of gains on
investments and a $2.09 million tax benefit, not from operations.

Behind the operating numbers sit three balance sheet items that decide how much freedom management
has. Cash and cash equivalents of $24.88 million. Restricted cash of $25.40 million, most of it
pledged against a court bond. And an accrued litigation liability of $19.70 million, sitting in
current liabilities, from a judgment the company is appealing.

Michael Murray is Chief Executive Officer and Erich Manz is Chief Financial Officer. The share count
at August 11, 2026 was 185,872,614, against an accumulated deficit of $402.34 million: a history of
losses that the recent years have not begun to reverse.

02 The Defense Base That Pays The Bills

Product revenue is what Kopin sells to customers rather than what partners and governments pay it
to develop. In the second quarter of 2026 it was $7.64 million out of $12.73 million of total
revenues, and it grew 1.9 per cent year on year, from $7.50 million.

The composition of that line explains why. Higher defense revenues from thermal weapon sight
applications and liquid crystal displays were, in the company’s own words, largely offset by lower
industrial applications revenue. The defense side is the durable part: thermal weapon sights, head-up
displays, helmet-mounted systems and armoured vehicle displays, sold through prime contractors on
programmes measured in years. The results release of May 12, 2026 listed a $21.5 million
follow-on production award for thermal imaging eyepieces from a United States defense prime among
the awards of the quarter and the period after it, the kind of contract that gives the product line
visibility without changing its trajectory.

The trajectory is the problem the equity has to reckon with. Product revenue for the first half of
2026 was $13.06 million against $16.73 million in the first half of 2025, a fall of 21.9 per cent,
and the first quarter alone was down 41 per cent year on year. Full-year 2025 product revenue was
$33.07 million against $43.58 million in 2024. The legacy business has been shrinking for two years
while everything the company talks about has been growing.

Margins are the second problem. Cost of product revenues in the second quarter was $6.59 million,
or 86 per cent of product revenue, which the company presents as an improvement from 94 per cent a
year earlier and attributes to mix. At 86 per cent, product gross margin is 14 per cent. A display
manufacturer running at that level is not funding its own research; it is being funded by someone
else, which is exactly what the rest of the income statement shows.

What the defense base does provide is credibility and access. The customers are programme offices
and prime contractors, the qualification cycles are long, and a company already inside those
programmes has a route to sell new technology into them. The colour MicroLED work and the Army
head-up display programme both exist because Kopin was already a supplier.

03 Colour MicroLED, IBAS And The Mid-2027 Date

The colour MicroLED programme is funded under the United States government’s Industrial Base
Analysis and Sustainment initiative, which exists to build domestic capacity in technologies the
Department of Defense does not want to import. Kopin’s award covers ultra-bright, full-colour
MicroLED displays for ground soldier augmented reality.

The release of August 10, 2026 reported three milestones, all achieved after the quarter closed.
The first is brightness: a single panel exceeding 150,000 nits of full-colour output, which the
company states is above the programme’s threshold target. The second is integration progress toward
United States Army ground soldier vision systems, with Soldier Borne Mission Command named as the
kind of future programme this feeds. The third is physical: new MicroLED bonding equipment delivered
to the Westborough headquarters, which is the step that turns a development capability into a
domestic manufacturing one.

The date attached to that is mid-2027 for the transition to domestic MicroLED product
manufacturing. It is a company-stated target, not a contract milestone with a published deadline, and
it is roughly a year away from the most recent report.

The money currently flowing from this shows up as grant income: $2.60 million in the second
quarter of 2026 and $6.04 million in the first half, against nothing in the comparable periods of
2025. The $2.69 million of deferred grant income carried at December 27, 2025 had been released to
revenue by the end of the half, leaving that line at zero. Grant income alone is most of the revenue
growth the company reported in the quarter. It is also, by construction,
temporary: a grant funds development, not production, and it stops when the programme does.

Beyond the Army, management says it is seeing international demand for colour MicroLED in head-up
displays, weapon sights and helmet systems. No contract, customer or value has been attached to that
statement in any filing.

04 Sentinel FPV And The Drone Dominance Program

Sentinel FPV is the newest product line and the one with the shortest history. Kopin entered the
first-person-view drone market in the first quarter of 2026 with an initial order of $3.2 million,
and the product’s differentiator, in the company’s description, is a Dual Situational Awareness
design.

The market it is aimed at is being created by policy. The United States government’s Drone
Dominance Program and its one-way attack drone initiative are attempts to build a domestic supply of
small attack drones at volume, on the evidence of what drones have done to conventional forces since
2022. Kopin sells into that as a component and subsystem supplier: the customers are the companies
bidding for the programmes, not the government itself.

In the August 2026 release the company reported multiple new prototype orders from customers
evaluating Sentinel FPV as a core part of their offerings, including several active contenders in the
Drone Dominance Program, and stated that volume orders under the programme are expected to begin in
late August 2026, immediately following Phase 2 evaluations and awards. Management added that it is
negotiating several large production orders for 2027.

Two things are separate there. Prototype orders are real revenue and are small. Volume
orders are the thesis, and as of the most recent filing they are expected rather than received. The
distinction matters more than usual here because the timing given, late August 2026, falls within
days of this update: whether Phase 2 awards land, and whether Kopin’s customers win them, is
verifiable within weeks rather than quarters.

What Kopin does not control is which bidder wins. Its exposure is to the programme happening at
all and to being designed into enough of the competing offerings that the outcome of any single award
does not matter. That is a better position than backing one horse, and a weaker one than holding the
contract.

05 Neural I/o: The Fabric.AI Agreement In Detail

Neural I/o is the reason a company with $39 million of annual revenue carries a market value near
a billion dollars. The idea is to use Kopin’s programmable MicroLED pixels as ultra-high-speed,
low-power optical transceivers, replacing copper between GPUs inside artificial intelligence data
centres. The company frames it as an extension of its patented bi-directional NeuralDisplay
architecture.

The commercial structure was signed on April 27, 2026, and the filing describes it precisely. Kopin
entered a Joint Development and License Agreement with Fabric.AI, Inc., formerly StableX
Technologies, to jointly develop and commercialise GPU-to-GPU connectivity technologies. Fabric.AI is
obliged to fund up to $15 million of development activities through successful demonstration, with
production-related funding subject to further negotiation. Project technology is jointly owned. And
Fabric.AI issued Kopin convertible preferred stock designed to give it approximately 19.99 per cent
of Fabric.AI’s outstanding common stock.

A commercial supply agreement signed the same day sets out the division of labour: Kopin
manufactures and supplies products incorporating the jointly developed technology, and Fabric.AI acts
as exclusive commercial seller for certain markets, explicitly excluding certain government and
military markets, which Kopin keeps.

By June 27, 2026 the full $15 million of committed funding had been received, $5 million of it
during the quarter. The Fabric.AI preferred stock was recorded as an equity investment at fair value
of $0.7 million. Revenue recognition has been deliberate: $0.5 million recognised as research and
development revenue in the quarter, with $5.2 million still sitting in contract liabilities as
advance payments and billings in excess of revenue recognised. The cash is in the door; the earnings
are not.

Progress since has been commercial rather than financial. The company reported signing several new
non-disclosure agreements, including with current NVIDIA NVLink partners, and released the first of a
planned series of AI interconnect white papers. It opened an Optics and Photonics Design Center in
Dallas, Texas, dedicated in part to Neural I/o. It plans to demonstrate the platform at CES in
January 2027, anchored by a 1.6-terabit-per-second transceiver solution, and says it is engaging
United States defense and government agencies on domestically manufactured versions.

What exists today, then, is a funded development programme with a demonstration date, a
manufacturing role written into a supply agreement, a minority stake in the partner, and no
production order. Non-disclosure agreements with NVLink partners are a signal that conversations are
happening, and they are not revenue. The gap between those two statements is where most of the
argument about this stock lives.

06 Theon, Kopin Europe And The Late Annual Report

The other partnership is older and has already changed the accounts. On August 8, 2025 Kopin
announced a $15 million strategic investment from Theon International Plc. It closed on
October 16, 2025 in three parts.

Theon acquired a 49 per cent interest in Kopin’s subsidiary Kopin Europe Ltd for $8.0 million. The
parties signed a licence and collaboration agreement for the joint development of military products,
covering the DarkWave module and subsystem, a Theon end product, and certain MicroLED and OLED
displays. And Theon bought 1,000 shares of Series A convertible preferred stock for $7.0 million.

The first of those had an accounting consequence larger than its price. Because of the sale and of
substantive participating rights given to Theon, Kopin was deemed to have lost its controlling
financial interest in Kopin Europe Ltd, and stopped consolidating it from October 16, 2025. The
retained interest is now an equity method investment carried at fair value, $8.10 million at
June 27, 2026, down from $8.90 million at the end of 2025. Deconsolidation produced a gain of
$11.10 million in the 2025 income statement, which is the single largest reason a year with a
$9.85 million operating loss ended with net income of $2.61 million.

That accounting is also why the annual report was late. On March 27, 2026 Kopin filed a
notification of late filing stating that fourth-quarter financing transactions involving third-party
investments raised complex technical accounting questions, including recognition, measurement and
presentation, and that additional time was needed for the valuations. The annual report followed on
April 13, 2026. A late annual report for accounting reasons is not the same thing as a restatement,
and nothing has been restated, but it belongs alongside any assessment of how complex this balance
sheet has become.

The preferred stock is gone. On May 28, 2026 Theon exercised its conversion right and converted all
1,000 Series A shares into common at a conversion price of $3.00, receiving 2,380,973 shares. No
Series A shares were outstanding at June 27, 2026. Against a share price of $5.04 on August 21, 2026,
that conversion was struck well below market.

Operationally the Theon relationship is still small in the accounts: total committed funding
received under the collaboration agreement was $1.0 million as of June 27, 2026, with $0.3 million
recognised as collaboration income in the quarter and $0.6 million in the half.

07 The Second Quarter Of 2026 In Numbers

The second quarter of 2026 covers the thirteen weeks to June 27, 2026. It is the first quarter in
which the new revenue lines are large enough to change the shape of the income statement.

Three readings come out of that table, and they point in different directions.

The first is that revenue growth is real and large: up 50.6 per cent in the quarter and 22.6 per
cent in the half. The second is that operating costs grew with it. Total operating expenses were
$16.24 million against $13.92 million, driven almost entirely by funded research and development,
which went from $0.46 million to $3.33 million. That line is a cost with a matching revenue: it is
what Kopin spends doing work that someone else is paying for. Selling, general and administrative
expense rose more modestly, to $5.13 million from $4.90 million, on higher professional fees and
accrued performance-based compensation.

The third is that the quarterly profit is not operational. Loss from operations narrowed to
$3.50 million from $5.46 million, which is genuine progress. Net income of $0.83 million exists
because of $2.34 million of gains on investments and a $2.09 million income tax benefit recorded, in
the company’s own explanation, in connection with the expiry of the statute of limitations on an
uncertain tax position. Neither item repeats by design.

For the half year the picture is plainer: an operating loss of $9.49 million, almost unchanged
from $9.37 million a year earlier, and a net loss of $2.92 million. Operating activities consumed
$5.14 million of cash over the six months.

08 The Revenue Mix, And Who Is Paying For It

The revenue line has changed character in eighteen months, and the change is the story.

In the second quarter of 2026, of $12.73 million of total revenues, $7.64 million was product
revenue and $5.09 million was not. The non-product half is made of four things: $2.60 million of
grant income from the government MicroLED award, $2.17 million of research and development revenue
including the Army’s Phase 2 Off-the-Visor head-up display programme, $0.27 million of collaboration
income, and $0.06 million of licence and other revenue. A year earlier the same four lines together
were about $1.0 million.

One detail in that split is worth getting right, because the company’s two descriptions of it do
not match. The note on the Theon agreement states that $0.3 million was recognised as collaboration
arrangement income in the quarter and $0.6 million in the half, which is the whole of that line. The
results release instead attributes collaboration revenue to the Fabric.AI programme and to a
strategic clip-on partnership. The Fabric.AI money, on the evidence of the notes, is sitting in
research and development revenue at $0.5 million for the quarter, not in the collaboration line.

That is what a company looks like when partners and governments decide to fund its research. It
has two consequences that pull against each other.

The good one: development that would otherwise be an expense is being paid for by someone else,
and it comes with validation. A government award, an Army programme and a $15 million commitment from
a commercial partner are three independent parties putting money behind the same technology base.

The awkward one: this revenue is not a business. Funded development carries costs that are close
to the revenue it generates, which is why growing it does not move the operating loss much. It stops
when the programme ends. It cannot be forecast from outside the company. And it flatters the
headline growth rate: stripped out, product revenue, the part customers pay for out of their own
budgets, fell 21.9 per cent in the first half of 2026 and 24.1 per cent in the full year 2025.

The Chief Financial Officer said on
August 10, 2026 that Kopin continues to expect a solid second half, exceeding its prior guidance, and
that it expects to make meaningful progress towards sustainable GAAP profitability in the fourth
quarter. That is guidance about direction rather than a number, and it puts a date on the claim: the
fourth quarter of 2026, reported in the spring of 2027.

09 Cash, Restricted Cash And The Balance Sheet

Kopin has more cash than it looks like it has, and less than the total suggests.

Unrestricted cash fell by $11.47 million over six months, from $36.35 million to $24.88 million,
while operations consumed $5.14 million. Most of the rest went into fixed assets: property, plant and
equipment nearly tripled, from $2.62 million to $7.30 million, on $5.11 million of purchases, which is
the physical build-out of domestic MicroLED and OLED capability. Equity investments also rose, from
$3.46 million to $10.28 million, but that movement did not consume cash: it is a revaluation plus the
Fabric.AI preferred stock received in kind.

Restricted cash of $25.40 million is the item that changes how the balance sheet reads. It is not
working capital. Of it, $24.2 million secures the letter of credit behind the supersedeas bond posted
in October 2025 so that the company could appeal the BlueRadios judgment without paying it first.
That money is unavailable while the appeal runs, and if the appeal fails it goes to the plaintiff.

Contract liabilities tell the other half of the funding story: they rose from $1.17 million to
$6.96 million, of which $5.2 million is Fabric.AI money received and not yet recognised as revenue.
The $2.69 million of deferred grant income that stood at the end of 2025 went the other way and was
released to revenue during the half. Roughly $7 million of the balance sheet is therefore cash already
collected for work not yet delivered: it funds the business today and becomes revenue tomorrow, not
new cash.

There is no borrowing for working capital. Total liabilities of $37.05 million are the litigation
accrual, trade payables, accrued payroll, contract liabilities, lease obligations, warranty and other
accrued items, the last of which carry the interest running on the judgment. The one credit
arrangement that does exist is the loan agreement signed with the company’s bank to obtain the letter
of credit behind the court bond, which gives the bank a security interest over $24.2 million of the
company’s own cash. The difficulty is not leverage; it is that unrestricted cash of $24.88 million
sits against an operating cash burn that ran at about $2.6 million a quarter in the first half, a
capital programme that consumed $5.11 million in six months, and a legal claim of $19.70 million
already accrued and not yet resolved.

10 BlueRadios: The Judgment, The Bond And The Appeal

BlueRadios, Inc. v. Kopin Corporation has been running since August 12, 2016 and it is the single
largest identified liability on the balance sheet.

BlueRadios alleged that Kopin breached a contract concerning the design and commercialisation of
micro-display products with embedded wireless technology known as Golden-i, breached the covenant of
good faith and fair dealing, breached fiduciary duty, and misappropriated trade secrets under
Colorado law and the Defend Trade Secrets Act. It also sought to correct the inventorship on at least
ten patents or applications to list its own employees, and thereby list itself as co-assignee.

On April 22, 2024, after a four-week trial, a jury found for BlueRadios, awarding approximately
$5.1 million in damages and recommending $19.7 million in disgorgement and exemplary damages. Kopin
moved for judgment as a matter of law or a new trial. BlueRadios sought a permanent injunction
against any Kopin product incorporating its trade secrets, over $10.8 million in pre-judgment
interest and over $10.2 million in fees and costs. At December 28, 2024 Kopin had accrued
$24.8 million.

The post-trial order of September 5, 2025 found for BlueRadios and awarded approximately
$19.7 million, but denied the permanent injunction and denied pre-judgment interest. Kopin reduced
its accrual to $19.7 million and recognised a $5.1 million benefit in the 2025 accounts. A separate
mutual release with its own lawyers on September 26, 2025 cut unpaid accrued legal expenses by
$3.3 million, recorded inside selling, general and administrative expense.

The denial of the injunction is the part that matters commercially. An injunction would have
barred the sale of products incorporating the disputed trade secrets, which for a display company is
an existential remedy. A monetary judgment is a number.

To appeal without paying, Kopin posted a supersedeas bond of $23.0 million on October 2, 2025,
covering the judgment, legal expenses and interest expected to accrue over the appeal. It borrowed
against its own cash to do so: the bank took a security interest in $23.0 million plus $1.15 million
of fees, $24.2 million in total, now classified as restricted cash, and issued a letter of credit to
the surety that wrote the bond. The appeal was filed on October 7, 2025. On June 25, 2026 BlueRadios
filed its opening and response appellate brief in the Federal Circuit, asking the court to affirm the
judgment and to reverse the parts of the decision that denied additional damages, injunctive relief
and unpaid retainer claims.

Two features of that filing matter. The appeal is cross-directional: Kopin is
trying to reduce or overturn the award, and BlueRadios is trying to restore the injunction and the
extra damages it was denied. And no decision date exists. At June 27, 2026 the accrual stood at
$19.7 million plus approximately $0.6 million of related interest, up from $0.3 million at the end of
2025, which is the meter running.

11 The Share Count

Kopin funds itself by issuing shares, and the record is visible in the share count rather than in
any single transaction.

At June 27, 2026 there were 186,974,903 shares issued and 1,102,289 held in treasury at a cost of
$2.46 million, which nets to 185,872,614, and that is also the figure on the cover of the quarterly
report for August 11, 2026. The balance sheet caption on the same document states 180,618,566 shares
outstanding at June 27, 2026, and the weighted average used for the quarter’s earnings per share is
188,232,764. The three numbers do not reconcile with one another from the face of the filing, and the
safest of them to use is the issued count of 186,974,903, which is stated without qualification. At December 27, 2025 the issued count was 183,015,207, and
weighted average shares for the second quarter of 2025 were 166.35 million against 188.23 million a
year later, a rise of 13.2 per cent in the average count across twelve months.

Two identifiable events sit inside that. Theon’s conversion of 1,000 Series A preferred shares on
May 28, 2026 at $3.00 produced 2,380,973 new shares. The balance is equity compensation settlement
and prior issuance. Additional paid-in capital rose from $463.15 million to $472.20 million over the
six months, an increase of $9.05 million, against a net loss of $2.92 million: the equity base grew
faster than the deficit, which is why book value per share held up at $0.38.

Authorised capital is 275,000,000 shares against 186,974,903 issued, so there is room for roughly
88 million more without a shareholder vote. On August 12, 2026 the company filed a registration
statement on Form S-8, which registers shares for employee equity plans rather than for sale to
investors, but which does add to the eventual count.

The practical read is that a company burning cash from operations, spending on a manufacturing
build-out and holding $24.2 million hostage to a court bond has one reliable source of funding, and
it is the equity market. The share price has tripled over a year, which makes that funding cheap
today and is precisely when companies in this position use it.

12 Market Snapshot: Beta, Float And Short Interest

Kopin closed at $5.04 on Friday August 21, 2026, up 3.07 per cent, on 3.07 million shares against
an average of 5.83 million. The market value is $936.80 million. The market data below is as
published by Finviz Elite at that close, and providers differ on float and insider ownership.

A beta of 3.58 is the number that describes this stock best. It says that, historically, moves in
the wider market have been amplified more than three times here. Combined with 15.35 per cent of the
float sold short and an average of 5.8 million shares traded a day on a 176.9 million share float,
this is a security whose price is set by flows at least as much as by filings.

The valuation multiples are the second thing to hold. Trailing twelve month revenue, taking the
$39.32 million of 2025 and swapping the first half of 2025 for the first half of 2026, is
$43.62 million. Against $936.80 million of market value that is 21.5 times sales, and the stock
trades at 13.15 times a book value of $0.38 a share. Those are numbers that assume the
Neural I/o and MicroLED programmes become large businesses. Nothing in the current income statement
supports them, and nothing in the current income statement is meant to.

The sell-side aggregate target of $8.67 and the recommendation score of 1.00 are figures published
by a data provider rather than a set of individual notes with identified houses and dates, and they
describe positioning rather than research.

13 Retail Sentiment On Stocktwits

Stocktwits is a retail message board. Its sentiment tags are self-reported by users who are not
professional investors, and what they measure is the temperature of a conversation, not the state of
a business.

On the reading taken on August 22, 2026, after Friday’s close, every sentiment-tagged message on
$KOPN was marked bullish, which gives a bull share of 100 per cent. The platform’s own normalised
sentiment score, which weighs more than the tags, read 37 out of 100 with the label bearish, and its
message-volume score read 51 with the label normal, having spiked to an extremely high reading over
the previous week. The symbol had 12,883 watchers.

The divergence between those two numbers is the interesting part: a stream in which nobody posts a
bearish tag, and a composite signal that reads bearish anyway. Both are describing a crowd whose
attention has moved from the fundamentals to the price.

The content of the most-engaged posts on August 21 supports that. They were about whether the
stock would close above $5.00 on an options expiry day, about where the call wall and put wall sat,
about whether short sellers would hold it down, and about a linked video describing Kopin as the only
American-made optical interconnect. One post carried a technical summary with an at-the-money implied
volatility of 108.6 per cent and a put-to-call ratio of 0.04. Almost none referenced the second
quarter results, the operating loss, the litigation accrual or the share count.

The recurring companion ticker is $FABC, the listed vehicle formerly known as StableX Technologies
and now named Fabric.AI, which is the counterparty to the Neural I/o agreement. Traders increasingly
treat the two as one position, and either stream reads differently once that is clear.

14 The Catalyst Map To 2027

Kopin’s calendar has more dated items than most companies this size, because several of them are
programme milestones rather than corporate events.

The nearest of those is also the most testable. If volume orders under the Drone Dominance Program
begin in late August 2026 as stated, the evidence should appear in the third quarter results in
November. If they do not, the same results will show it.

15 Risks And Red Flags

The paying business is shrinking. Product revenue fell 21.9 per cent in the first
half of 2026 and 24.1 per cent in 2025. Total revenue growth is coming from grants, funded
development and collaboration income, which are not customer demand.

The profit was not operational. The quarterly net income of $0.83 million rests on
$2.34 million of investment gains and a $2.09 million tax benefit from the expiry of a statute of
limitations. Loss from operations was $3.50 million.

Product gross margin is 14 per cent. Cost of product revenues ran at 86 per cent
of product revenue in the quarter, improved from 94 per cent. A hardware business at that level
cannot fund its own development.

Concentration on programmes rather than customers. The MicroLED award, the Army
head-up display work and the Fabric.AI agreement are three counterparties. Government programmes can
be re-scoped, delayed or defunded, and the results release of May 12, 2026 described the company’s
core defense order momentum as having recovered from federal government shutdowns.

Neural I/o is pre-revenue in substance. The $15 million from Fabric.AI is
committed and received, but $5.2 million of it sits in contract liabilities, the demonstration is
scheduled for January 2027, and no production order exists. Non-disclosure agreements with NVLink
partners are a signal, not a contract.

Dilution is the funding model. The weighted average share count rose 13.2 per cent
year on year, 88 million shares of authorised capital remain unissued, and unrestricted cash of
$24.88 million covers roughly two years of the current operating burn before any capital
expenditure.

The accounting is more complex than the company’s size. A deconsolidation gain of
$11.10 million made 2025 profitable, an equity method investment is carried at fair value, a partner
stake is carried at $0.7 million, and the annual report was filed late because those transactions
required additional valuation work.

Valuation leaves no room. 21.5 times trailing twelve month revenue and 13.15
times book, on a beta of 3.58, with 15.35 per cent of the float sold short. The price already assumes the programmes work.

The stock has nearly tripled in a year. Up 188 per cent over twelve months and
120 per cent over six, against operating losses in every quarter of the period. Whatever the outcome, the
easy repricing has happened.

16 Scenarios

The scenarios below describe how the known facts could develop. They carry no probabilities, no
price levels and no recommendation.

Between the two sits the position the filings actually describe: a company that has convinced
three separate counterparties to fund its research, has not yet convinced customers to buy the
output, and has bought itself time with other people’s money rather than its own margins.

17 Bottom Line

Kopin in August 2026 is a small hardware company that has been handed a large option. The option
is Neural I/o: MicroLED pixels as optical interconnects between GPUs, funded to $15 million by
Fabric.AI, with Kopin as manufacturer and a 19.99 per cent stake in the partner. If optical
interconnect displaces copper inside AI data centres, and if Kopin is one of the companies making it,
the current market value of $936.80 million will look small.

Everything else is the cost of holding that option. Product revenue down 21.9 per cent
in the half. An operating loss of $3.50 million in the quarter and $9.49 million in the half. Product
gross margin at 14 per cent. Unrestricted cash of $24.88 million and another $25.40 million locked
behind a court bond. A $19.7 million judgment on appeal, with no decision date and a plaintiff asking
for more. And a share count that rises every period.

The three things that would change the picture are all dated. Volume orders under the Drone
Dominance Program, expected from late August 2026 and visible in the November results. The fourth
quarter of 2026, in which management expects meaningful progress towards sustainable GAAP
profitability. And the CES demonstration in January 2027, followed by the mid-2027 manufacturing
transition.

What the second quarter proved is narrower than the headline suggested: revenue can grow 50 per
cent when partners are paying for development, and the company can still lose $3.50 million from
operations while doing it. What it has not yet proved is that anyone will buy the finished
product.

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