Kopin Provides Business Update and Third Quarter 2016 Operating Results

Kopin Corporation (NASDAQ: KOPN),
a leading developer of innovative wearable computing technologies and
solutions, today provided an update on its business initiatives and
reported financial results for the third quarter ended September 24,
2016.

“The enthusiasm and excitement around wearables continues to grow and
Kopin made further progress in the third quarter testing and evaluating
opportunities with potential partners,” said Dr. John C.C. Fan, Kopin’s
President and CEO. “We are confident our displays, optics and Whisper™
Chip technology will be key components in many upcoming products from
global technology companies. On my recent trip to Asia to further many
of these opportunities, it became clear that Asian companies are ahead
in monetizing augmented reality (AR) and virtual reality (VR), and many
are close to commercial manufacturing. It also confirmed that the Asian
view around these emerging technologies is more closely aligned with
Kopin’s thoughts: AR/VR should be used for mobile applications, with
interface to a smart phone and not a stationary PC; the headsets should
be small, light weight and comfortable to wear but still provide an
immersive experience; and the devices should be voice centric and not
touch centric. With this similar outlook and the technology to power it,
Kopin is a highly respected partner in Asia and would place Kopin
products across different verticals and companies throughout Asia.

“In fact, we are already seeing this view played out by Softbank, which
has recently exhibited our Solos™ wearables in Japan. Solos, our headset
targeted to the elite cycling community, features Kopin’s unique Pupil
Optics and micro display. Solos uses our world’s smallest heads-up
display module and pairs it with our best in class performance tracking,
precision training tools and other useful features. The response from
our Kickstarter campaign was very strong, and we are exploring
refinements to target Solos at other markets such as runners.

“Even without these developments utilizing our new technologies, our
core business is on track for significant revenue growth next year.
Production is under way for the displays Kopin provides to the world’s
most advanced augmented reality pilot helmet used in the Joint Strike
Fighter (F-35). The program is progressing in line with typical new
programs, and we look for revenues from this opportunity to increase in
2017. We received additional orders for shipments under the Family of
Weapon Sight – I (FWS-I) program, which is an integrated night vision
targeting solution. These shipments are part of the Low Rate Initial
Production (LRIP) phase of the program. We also expect to receive
development contracts by year end for the companion program to the
FWS-I, the Family of Weapon Sight – C (FWS-C) and we look for revenues
to grow throughout 2017 from both programs.

“Another opportunity is the new Scott Sight for firefighters introduced
by Scott Safety, a division of Tyco. Kopin is providing the display
module for the world’s first in-mask thermal imaging camera system that
provides firefighters improved visibility in smoke-filled environments.
Currently firefighters carry a thermal imaging camera in their hands
which impedes their ability to perform. Popular Science just awarded the
Scott Sight a “Best of What’s New” award due to the ‘situational
intelligence’ the headset provides to firefighters. We look for strong
revenue growth in this segment in 2017. One can expect new applications
for Kopin’s technology in the health and safety fields, where the use of
AR can enhance situational awareness and productivity. VR is also
helping to drive our sport drone business, primarily out of China, and
we are on track for that business to grow 30-40% this year, increasing
again next year.

“In the third quarter of 2016 we had 11 new patents granted and 11 new
applications. Our portfolio of over 300 patents and patent pendings
covers various wearables technologies and designs and helps ensure Kopin
will be a leading provider for mobile AR/VR markets. With over $84
million in cash and equivalents and marketable securities at the end of
the third quarter of 2016 we have the financial resources to fund our
current plans and the opportunities ahead with partners. We are very
encouraged by our progress this year and are very excited to see these
achievements monetized in 2017,” concluded Dr. Fan.

We expect exciting developments in the next six to nine months, with
major announcements in the coming CES in January, 2017 and Mobile World
Congress in March, 2017 and we hope you will have an opportunity to
visit us at these major shows.

Third Quarter Financial Results

Total revenues for the third quarter ended September 24, 2016 were $5.8
million, compared with $8.0 million for the third quarter ended
September 26, 2015. Sales of products for wearable applications were
$1.5 million for the third quarter of 2016 as compared to $3.5 million
in the third quarter of 2015. Included in the third quarter of 2015
revenues was $1.8 million related to renegotiated contract terms due to
the customer’s lowered forecasted program volumes.

Research and development (R&D) expenses for the third quarter of 2016
were $4.1 million compared with $4.0 million for the third quarter of
2015.

Selling, general and administrative (SG&A) expenses were $4.0 million
for the third quarter of 2016 as compared with approximately $4.6
million for the same period in 2015.

Net loss attributable to the controlling interest for the third quarter
of 2016 was $7.8 million, or $0.12 per share, compared with net loss of
$4.7 million, or $0.07 per share, for the third quarter of 2015.

We have maintained our strong financial position. Net cash used in
operating activities for the nine months ended September 24, 2016 was
approximately $19.4 million. Kopin’s cash and equivalents and marketable
securities were approximately $84.3 million at September 24, 2016 as
compared to $80.7 million at December 26, 2015 and we have no long-term
debt.

All amounts above are estimates and readers should refer to our Form
10-Q for the quarter ended September 24, 2016 for final disposition.

Financial Results Conference Call

In conjunction with its third quarter 2016 financial results, Kopin will
host a teleconference call for investors and analysts at 8:30 a.m.
ET today. To participate, please dial (877) 709-8150 (U.S. and Canada)
or (201) 689-8354 (International). The call will also be available as a
live and archived audio webcast on the “Investors” section of
the Kopin website, www.kopin.com.

About Kopin

Kopin Corporation is a leading developer and provider of innovative
wearable technologies and solutions for integration into head-worn
computing and display systems to military, industrial and consumer
customers. Kopin’s technology portfolio includes ultra-small displays,
optics, speech enhancement technology, system and hands-free control
software, low-power ASICs, and ergonomically designed smart headset
reference systems. Kopin’s proprietary components and technology are
protected by more than 300 global patents and patents pending. For more
information, please visit Kopin’s website at www.kopin.com.

Kopin, Whisper, and Solos are trademarks of Kopin Corporation.

Forward-Looking Statements

Statements in this press release may be considered “forward-looking”
statements under the “Safe Harbor” provisions of the Private Securities
Litigation Reform Act of 1995. These include, without limitation,
statements relating to our expectation that we are confident our
displays, optics and Whisper Chip technology will be key components in
many upcoming products from global technology companies; our core
business is on track for significant revenue growth next year; the F-35
program is progressing in line with typical new programs, and we look
for revenues from this opportunity to increase in 2017; we also expect
to receive development contracts by year end for the companion program
to the FWS-I, the Family of Weapon Sight – C (FWS-C) and we look for
revenues to grow throughout 2017 from both programs; we look for strong
revenue growth in the public safety segment in 2017; for new
applications for Kopin’s technology in the health and safety fields; we
are on track for our sport drone business to grow 30-40% this year,
increasing again next year; with over $84 million in cash at the end of
the third quarter of 2016 we have the financial resources to fund our
current plans and the opportunities ahead with partners; and our
expectation ofexciting developments in the next six to nine
months, with major announcements in the coming CES in January, 2017 and
Mobile World Congress in March, 2017. These statements involve a number
of risks and uncertainties that could cause actual results to differ
materially from those expressed in the forward-looking statements. These
risks and uncertainties include, but are not limited to, the following:
there may not be demand for our products and therefore they may not be
key components in products from global technology companies; our core
business may not grow next year; revenues from the F-35 program may not
increase in 2017; the F-35 program may be postponed or cancelled; we may
not receive development contracts for the FWS-C program; our revenue
from the FWS-I and FWS-C program may not increase in 2017; our sports
drone business may not increase 30-40% this year and may not increase
next year; our $84 million in cash and marketable securities might not
be sufficient financial resources to fund our current plans and the
opportunities ahead with partners; the final amounts in the Company’s
Form 10-Q for the period ended September 24, 2016 may differ from the
amounts included in the release above;it may take longer than
the Company estimates to develop products; the Company’s products may
not be accepted by the market place; there may be issues that prevent
the adoption or further development of the Company’s wearable computing
technologies; manufacturing, marketing or other issues may
prevent either the adoption or acceptance of products; the Company might
be adversely affected by competitive products and pricing; new product
initiatives and other research and development efforts may be
unsuccessful; the Company could experience the loss of significant
customers; costs to produce the Company’s products might increase
significantly, or yields could decline; the Company’s
customers might be unable to ramp production volumes of their products,
or the Company’s product forecasts could turn out to be wrong;
manufacturing delays, technical issues, economic conditions or external
factors may prevent the Company from achieving its goals; we are
dependent upon certain sole source providers of some components of our
products and if such providers are not able to provide us such
components for any reason, including, without limitation, U.S.
regulatory issues such as compliance with EPA regulations, we could be
delayed in shipping some of our products; and other risk factors and
cautionary statements listed in the Company’s periodic reports and
registration statements filed with the Securities and Exchange
Commission, including the Annual Report on Form 10-K for the 12 months
ended December 26, 2015, and the Company’s subsequent filings with
the Securities and Exchange Commission. You should not place undue
reliance on any forward-looking statements, which are based only on
information currently available to the Company and only as of the date
on which they are made. The Company undertakes no obligation to update
any of these forward-looking statements to reflect events or
circumstances occurring after the date of this release.

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Kopin Corporation
Richard Sneider, 508-870-5959
Treasurer
and Chief Financial Officer
Richard_Sneider@kopin.com
or
Market
Street Partners
Joann Horne, 415-445-3233
JHorne@marketstreetpartners.com