KOPN.NASDAQKopin CORP
10-K/A: Kopin Corporation Files Amendment No. 1 to Form 10-K to Include Omitted Information
Sentiment:
Form 10-K/A (Amendment No. 1)
Kopin Corporation files Amendment No. 1 to its Form 10-K to include information previously omitted from Part III, Items 10 through 14, and Part IV, Item 15.
Delay expectedMs. Sief filed a Form 4 late due to delays in obtaining her EDGAR filing codes.
Better than expectedThe company's fiscal year 2024 revenues increased by 24.6% compared to the previous year.The company's fiscal year 2024 product revenues increased to $43.6 million as compared to fiscal year 2023 product revenues of $25.9 million.The company's fiscal year 2024 gross margins increased to 17% from approximately four percent for fiscal year 2023.
Summary
- Kopin Corporation filed Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 28, 2024, to include information required by Items 10 through 14 of Part III, which were previously omitted.
- The amendment restates Items 10 through 14 of Part III and Item 15 of Part IV in their entirety.
- The document includes new certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
- The Board of Directors consists of six members: Michael Murray, Jill Avery, Chi Chia Hsieh, David Nieuwsma, Margaret Seif, and Paul Wash, Jr.
- Dr. Hsieh will not stand for reelection at the 2025 Annual Meeting.
- Executive compensation highlights include base wage increases for Messrs. Murray, Sneider, and Baker.
- Mr. Murray received a bonus of $668,000 for fiscal year 2024 performance.
- Mr. Murray received a grant of 1,200,000 shares of restricted stock, vesting based on performance goals including $65 million revenue and 6% operating profit in fiscal year 2026.
- Messrs. Sneider and Baker earned 25,505 and 22,972 shares, respectively, of restricted stock based on achieving approximately 56% of revenue, cash flow, and individual goals.
- The company's compensation philosophy is to reward executives for individual and corporate performance, aligning their interests with those of stockholders.
- The Compensation Committee engaged Aon to assist in selecting a peer group for benchmarking NEO compensation.
- The aggregate fees for the fiscal year ended December 28, 2024, billed by the company's independent registered public accounting firm, BDO USA, P.C., for fiscal year 2024 were $1,049,450.
- The company has adopted policies and procedures that apply to any transaction or series of transactions in which Kopin, or a subsidiary, is a participant, the amount involved exceeds $120,000 and a related person has a direct or indirect material interest.
Sentiment
Score: 7
Explanation: The document presents a mixed sentiment. While there are positive aspects such as revenue growth and improved gross margins, the operating loss and litigation accrual temper the overall outlook. The inclusion of previously omitted information is a necessary correction, but doesn't inherently impact sentiment positively or negatively.
Positives
- Executive compensation is aligned with company goals and stockholder interests.
- The company uses a compensation consultant to ensure fair and competitive pay.
- The company has a clawback policy to recover performance-based compensation in cases of fraudulent or illegal conduct.
- The company has stock ownership guidelines for directors and the CEO to align their interests with stockholders.
- The Audit Committee pre-approves all audit and non-audit services provided by the company's independent registered public accounting firm.
Negatives
- The document mentions a litigation accrual of $24.8 million contributing to an operating loss of approximately $43.1 million for fiscal year 2024.
- Dr. Hsieh will not be standing for reelection at the 2025 Annual Meeting.
Risks
- Failure to achieve performance goals could impact executive compensation.
- Economic downturns or industry-specific challenges could affect the company's ability to meet revenue and profit targets.
- The company's reliance on a few key executives could pose a risk if they were to leave the company.
- The company's stock price could be negatively impacted by market conditions or company-specific events.
Future Outlook
The company aims to increase revenues and cash flow, with a focus on operational excellence through the 'One Kopin' reorganization plan.
Management Comments
- In 2024, we continued the reorganization of Kopin under a program we call One Kopin.
- We have three manufacturing and assembly locations and previously the business development and engineering staff concentrated on the products made at those locations.
- In 2023, we started the process of creating one Business Development group that would sell all of Kopins products and one engineering group that would work on the design, development and manufacturing of all of Kopins products with the understanding that there are limits because of the nature of some of our products.
Industry Context
Kopin operates in the market for microdisplays and related solutions, serving the military, industrial, and wearable technology sectors. The company's performance is influenced by trends in these industries, including demand for advanced display technologies, government defense spending, and the adoption of wearable devices.
Comparison to Industry Standards
- The document mentions several peer companies used for benchmarking executive compensation, including 908 Devices, Everspin Technologies, and CEVA Inc.
- These companies operate in similar technology sectors and have comparable revenue and market capitalization sizes.
- Kopin's executive compensation practices are evaluated against these peers to ensure competitiveness and alignment with industry standards.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Director | Chi Chia Hsieh | TBD | Following the 2025 Annual Meeting | Dr. Hsieh will not be standing for reelection |
Stakeholder Impact
- Shareholders: Executive compensation is designed to align with shareholder interests, and the company's performance impacts shareholder value.
- Employees: Compensation and benefits are provided to attract, retain, and motivate employees.
- Customers: The company's products and services impact its customers, particularly in the military, industrial, and wearable technology sectors.
Next Steps
- The company will continue to execute its 'One Kopin' reorganization plan.
- The Board will determine performance achievement for the 2026 Performance-Based Equity Award in 2027 based on audited financials for fiscal year 2026.
- The company will hold its 2025 Annual Meeting, where Dr. Hsieh will not stand for reelection.
Key Dates
| Date | Description |
|---|---|
| 1934 | Securities Exchange Act of 1934 |
| 1985-04-22 | License Agreement by and between the Company and Massachusetts Institute of Technology |
| 1993-10-15 | Facility Lease, by and between the Company and Massachusetts Technology Park Corporation |
| 1998-09 | Richard A. Sneider has served as our Treasurer and Chief Financial Officer since September 1998. |
| 2002 | Sarbanes-Oxley Act of 2002 |
| 2004 | Since 2004 we have only issued restricted stock awards and the fair value of the award is typically based on the closing price of our stock on Nasdaq on the day of grant. |
| 2009-01-01 | Clawback Policy effective for performance-based compensation made on or after January 1, 2009 |
| 2013 | Jill J. Avery is a Senior Lecturer of Business Administration and C. Roland Christensen Distinguished Management Educator in the marketing unit at Harvard Business School, a position she has held since 2013. |
| 2014 | From 2014 to 2022 Ms. Seif held various positions including Chief People Officer and Chief Legal Officer at Analog Devices, Inc. |
| 2014 | From 2014 to 2022 Ms. Seif held various positions including Chief People Officer and Chief Legal Officer at Analog Devices, Inc. |
| 2017-01 | Paul Baker served as Senior Vice President, Business Development from January 2017 to January 2019 |
| 2019-02 | Paul Baker previously served as the Company's Strategic Business Officer from February 2019 to January 2020 |
| 2019-09-30 | Asset Purchase Agreement, dated September 30, 2019, by and between Kopin Corporation, Kopin Display Corporation and Solos Technology Limited. |
| 2020-01 | Paul Baker has held his present position with the Company since January 2020 |
| 2020-05-20 | Kopin Corporation 2020 Equity Incentive Plan filed as an exhibit to Current Form on 8-K on May 20, 2020 |
| 2020 | Mr. Murray joined Kopin in September 2022 from Ultra Electronics Group (Ultra), a British Defense and Security company he joined in 2020, where he served as President of the Cyber business, working with defense ministries and governments. |
| 2021 | Dr. Avery has served as one of our directors since 2021. |
| 2022-02 | Prior to retiring in February 2022, Mr. Walsh served as Chief Financial Officer, Senior Vice President and Treasurer, at Allegro MicroSystems, Inc. |
| 2022-09-06 | Mr. Murray has served as our President and Chief Executive Officer since September 6, 2022. |
| 2022-09 | Mr. Michael Murray joined Kopin as President and Chief Executive Officer in September 2022. |
| 2022-10 | Mr. Walsh served as an advisor to the board of directors and audit committee of Anokiwave, Inc., a late-stage semiconductor company, from October 2022 to February 2024, where he was also an investor. |
| 2023-11 | Mr. Nieuwsma has served as one of our directors since November of 2023. |
| 2024-04-15 | On April 15, 2024 the Company and Mr. Murray signed a new Employment Agreement |
| 2024-05 | Ms. Seif has served as one of our directors since May 2024. |
| 2024-06-06 | The 2024 grant occurred on June 6, 2024, and the closing price of our stock was $0.78. |
| 2024-06-28 | As of June 29, 2024 (the last business day of the registrants most recent second fiscal quarter), the aggregate market value of outstanding shares of voting stock held by non-affiliates of the registrant was $ 99,230,825 |
| 2024-06 | Mr. Nieuwsma joined the Audit Committee in June 2024 and attended two of the three subsequent meetings. |
| 2024-06 | Mr. Nieuwsma and Ms. Seif were added to the Compensation Committee in June 2024 and participated in all seven subsequent meetings. |
| 2024-09-03 | On September 3, 2024, Ms. Sief filed a Form 4 for her initial equity grant of 64,500 shares of the Company's common stock which occurred on June 6, 2024. |
| 2024-09-09 | Mr. Walsh joined the Board of Directors on September 9, 2024 and he was granted 64,500 shares of restricted stock. |
| 2024-09 | Mr. Walsh joined the Audit Committee in September 2024 and attended the two subsequent meetings. |
| 2024-09-20 | Underwriting Agreement, dated September 20, 2024, by and between Kopin Corporation and Canaccord Genuity LLC |
| 2024-12-28 | Fiscal year ended December 28, 2024 |
| 2025-04-16 | As of April 16, 2025, 162,067,000 shares of the registrants Common Stock, par value $ .01 per share, were issued and outstanding. |
| 2025-04-17 | This Amendment No. 1 to Kopin Corporations Annual Report on Form 10-K for the year ended December 28, 2024 as originally filed with the Securities and Exchange Commission on April 17, 2025 |
| 2025-04-29 | This information is based solely on information reported on a Schedule 13G filed on April 29, 2025 with the SEC on behalf of Royce & Associates LP. |
| 2025-05-01 | The table below contains information, as of the dates below, regarding the beneficial ownership of all those known to us to be a beneficial owner of more than 5% of our common stock as well as our directors and nominees, named executive officers and all of our executive officers and directors as a group as of May 1, 2025. |
| 2025 | Dr. Hsieh is a director of KoBrite Corp. (KoBrite), in which Kopin owned a minority interest which Kopin sold in 2025. |
| 2025 | Dr. Hsieh will not be standing for reelection as a director and following the 2025 Annual Meeting (the Meeting), he will cease to serve as a director. |
| 2025-12-10 | Shares vest on December 10, 2025 |
| 2026 | Mr Murray was awarded a bonus for fiscal year 2024 performance of $668.000 Mr. Murray received a grant of 1,200,000 shares of restricted stock (2026 Performance-Based Equity Award) which shall vest based on the attainment of corporate performance goals and targets, including a minimum revenue for the fiscal year 2026, and his continued employment through December 31, 2026. |
| 2026-12-31 | Mr Murray was awarded a bonus for fiscal year 2024 performance of $668.000 Mr. Murray received a grant of 1,200,000 shares of restricted stock (2026 Performance-Based Equity Award) which shall vest based on the attainment of corporate performance goals and targets, including a minimum revenue for the fiscal year 2026, and his continued employment through December 31, 2026. |
| 2027 | Performance achievement will be determined by the Board in its reasonable discretion exercised in good faith in 2027 based on the audited financials for fiscal year 2026, and in no event will the 2026 Performance-Based Equity Award be earned at greater than 120% of target. |
Keywords
executive compensation, corporate governance, directors, financial performance, restricted stock, audit fees, Kopin Corporation, Form 10-K/A
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