10-K/A: Kopin Corporation Files Amendment to 10-K to Correct Executive Compensation Details

Sentiment:

Form 10-K/A (Amendment) 20 May 2025 5:28 PM

Kopin Corporation amended its annual report on Form 10-K to correct certain amounts within Item 11, Executive Compensation, including the Summary Compensation Table.

Summary

Kopin Corporation filed Amendment No. 2 to its Annual Report on Form 10-K for the year ended December 28, 2024, to correct certain amounts within Item 11, Executive Compensation.
The amendment restates Items 10 through 14 of Part III and Item 15 of Part IV of the original Form 10-K in their entirety.
The filing includes new certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
The company's fiscal year 2024 revenues were $50.3 million, a 24.6% increase over the $40.4 million in 2023.
Product revenues increased to $43.6 million in 2024 from $25.9 million in 2023.
Gross margins increased to 17% in 2024 from approximately 4% in 2023.
The operating loss for 2024 was approximately $43.1 million, including a $24.8 million litigation accrual, compared to an operating loss of $17.1 million in 2023.
The company received orders in excess of $40 million in fiscal year 2024.
Base wages for Messrs. Murray, Sneider, and Baker increased to $495,000, $359,520, and $334,184, respectively, in 2024.
Mr. Murray was awarded a bonus of $668,000 for fiscal year 2024 performance.
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.
The target number of restricted shares is 1,000,000 and the target performance goals are fiscal year 2026 revenue of $65 million and a consolidated 6% operating profit.
Messrs. Sneider and Baker earned 25,505 and 22,972 shares, respectively, of restricted stock granted based on fiscal year 2024 performance, representing approximately 56% of the goals.
Messrs. Sneider and Baker each received restricted stock grants of 75,000 shares that vest over three years, starting December 10, 2025.
Mr. Murray's new employment agreement, signed on April 15, 2024, set his salary at $495,000 with eligibility for a target bonus of 100% of base salary, up to a maximum of 150% based on a formula determined by the Board.
In 2024, stockholders approved the executive compensation program with 71.6% of votes in favor.
The company uses a mix of base salary, annual incentives, and long-term incentives to compensate executives.
The Compensation Committee uses peer group benchmarking analysis to determine executive compensation.
The company has a Clawback Policy for recovering performance-based compensation in cases of fraudulent or illegal conduct leading to financial restatements.
The company has share ownership and retention guidelines for directors and the CEO.
The company's Insider Trading Policy prohibits short sales and limits transactions in company securities.
The company granted an aggregate of 4,388,090 shares of restricted common stock in 2024, with 1,246,590 shares contingent on achieving milestones in fiscal year 2024.

Sentiment

Score: 6

Explanation: The document is factual and reports on financial performance and executive compensation. While revenue increased, the operating loss is a concern, resulting in a neutral sentiment score.

Positives

Fiscal year 2024 revenues increased by 24.6% to $50.3 million compared to $40.4 million in 2023.
Product revenues increased to $43.6 million in 2024 from $25.9 million in 2023.
Gross margins improved to 17% in 2024 from approximately 4% in 2023.
The company received orders in excess of $40 million in fiscal year 2024.
Stockholders approved the executive compensation program with 71.6% of the votes in favor.

Negatives

The operating loss for 2024 was approximately $43.1 million, including a $24.8 million litigation accrual, compared to an operating loss of $17.1 million in 2023.

Risks

The company's operating loss increased significantly in 2024 due to a litigation accrual.
Achievement of performance goals for equity awards is subject to the Board's discretion and potential modifications.
The company's future performance is tied to achieving revenue and operating profit targets in fiscal year 2026.

Future Outlook

The company aims to increase revenues and cash flow, with a focus on achieving $65 million in revenue and a 6% operating profit in fiscal year 2026 to meet performance-based equity award targets.

Management Comments

In 2024, we continued the reorganization of Kopin under a program we call One Kopin.
In fiscal year 2023, our strategic emphasis shifted to improving operational excellence through a reorganization plan we refer to as One Kopin.
Accordingly, we are in the process of adjusting our performance award system to be based more towards financial and operational metrics, specifically revenue growth, gross margin improvement, on-time in-full deliveries, production yields, and cash flow improvement.

Industry Context

The document provides insight into Kopin's executive compensation practices and financial performance within the micro-display and related technology industry, but does not provide specific details on how this announcement relates to broader industry trends or competitors.

Stakeholder Impact

Shareholders: The amendment provides corrected information on executive compensation.
Employees: The document details compensation structures and incentives for executives and other employees.

Next Steps

Achievement of performance goals for equity awards in fiscal year 2026.
Board determination of performance achievement in 2027 based on audited financials for fiscal year 2026.

Key Dates

Date	Description
1985-04-22	License Agreement by and between the Company and Massachusetts Institute of Technology dated April 22, 1985, as amended, filed as an exhibit to Registration Statement on Form S-1, File No. 33-45853, and incorporated herein by reference.
2019-01-17	Offer Letter, dated January 17, 2019, by and between Kopin Corporation and Paul Baker filed as an exhibit to the Current Report on Form 8-K filed on January 22, 2019 and incorporated by reference herein.
2019-04-12	Sixth Amended and Restated By-laws filed as an exhibit to Current Report on Form 8-K filed on April 12, 2019 and incorporated herein by reference.
2019-09-30	Asset Purchase Agreement, dated September 30, 2019, by and between Kopin Corporation, Kopin Display Corporation and Solos Technology Limited.
2020-05-20	Kopin Corporation 2020 Equity Incentive Plan filed as an exhibit to Current Form on 8-K on May 20, 2020 and incorporated by reference herein.
2020-12-31	Tenth Amended and Restated Employment Agreement between the Company and Dr. John C.C. Fan, dated as of December 31, 2020, filed as an exhibit to the Annual Report on Form 10-K for the fiscal year ended December 25, 2021 and incorporated herein by reference
2022-07-14	Letter Agreement between Kopin Corporation and Michael Murray, dated July 14, 2022, filed as an exhibit to the Quarterly Report on Form 10-Q for the quarterly period ended September 24, 2022 and incorporated by reference herein.*
2022-09-05	Amendment to Employment Agreement between Kopin Corporation and John C. C. Fan, dated September 5, 2022, filed as an exhibit to the Quarterly Report on Form 10-Q for the quarterly period ended September 24, 2022 and incorporated by reference herein.*
2022-09	Mr. Michael Murray joined Kopin as President and Chief Executive Officer in September 2022.
2023-01-26	Form of Pre-Funded Warrant filed as an exhibit to Current Report on Form 8-K filed on January 26, 2023 and incorporated herein by reference.
2024-04-05	Employment Agreement between Kopin Corporation and Michael Murray, dated as of April 5, 2024, filed as an exhibit to the Quarterly Report on Form 10-Q for the quarterly period ended March 30, 2024 and incorporated by reference herein.
2024-04-15	The Company and Mr. Murray signed a new Employment Agreement on April 15, 2024.
2024-06-06	Each Board member received his or her annual restricted stock grant of 64,500 shares which vests on the anniversary of the grant if the person is still a member of our Board of Directors on such anniversary with the exception of Mr. Walsh. The amounts in the column were determined by multiplying the number of shares of restricted common stock granted by the closing price of our common stock as listed on the Nasdaq on the day of grant. The 2024 grant occurred on June 6, 2024, and the closing price of our stock was $0.78.
2024-06-28	On June 28, 2024 Mr. Murray received a grant of 1,200,000 shares of restricted stock which shall vest based on the attainment of corporate performance goals and targets, including a minimum target revenue for the fiscal year 2026 of $65 million and an operating profit of 6%, and his continued employment through December 31, 2026.
2024-09-09	Mr. Walsh joined the Board of Directors on September 9, 2024 and he was granted 64,500 shares of restricted stock. Our stock price on September 9, 2024 was $0.85.
2024-09-20	Form of Pre-Funded Warrant filed as an exhibit to Current Report on Form 8-K filed on September 20, 2024 and incorporated herein by reference.
2024-09-20	Underwriting Agreement, dated September 20, 2024, by and between Kopin Corporation and Canaccord Genuity LLC, as representative of the underwriters named therein filed as an exhibit to the Current Report on Form 8-K filed on September 20, 2024 and incorporated by reference herein.
2024-12-28	Fiscal year ended December 28, 2024.
2026-12-31	Mr. Murray's 1,200,000 shares of restricted stock 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.
2025-05-20	Date of filing of the amendment.

Keywords

executive compensation, restricted stock, annual report, revenue, operating profit, Kopin Corporation, Form 10-K, amendment

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