Kopin Provides Business Update and First Quarter 2018 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 first quarter of 2018, ended March
31, 2018.

“Our results were again driven by our military business, in particular
the continued ramp of the F-35 fighter jet program, where Kopin is the
sole supplier of displays for the pilot helmets. In addition to our
current purchase agreement, we have been notified that we should soon
receive follow-on orders for revenues through 2019,” said Dr. John C.C.
Fan, CEO of Kopin. “After quarter-end we received initial production
authorization for the procurement of long-lead materials for the FWS-I
program, which support the production of 5,000 eyepieces, with shipments
beginning in August. The FWS-C program continues in early development,
and we are now beginning the early development process on the armored
vehicle program we won last quarter. We are pleased this program was
just expanded to include the development of additional eyepiece scopes,
which increases the potential value over the life of the program from
$40 million to $80 million. Finally, our new Brillian™ LCD microdisplay
product line, which was created specifically to meet the extremely high
brightness requirements of next generation aviation AR applications, has
been well received by the military. We expect follow-on orders as
development continues on new helmets utilizing the display.”

Dr. Fan continued, “Our enterprise customers have reported good demand
for their augmented reality (AR) headsets, matching the optimism earlier
this year at CES where a number of customers indicated they were
starting to see the widespread adoption of AR by businesses across many
industries, including healthcare, aviation and automotive. Kopin’s
displays and optics are key components of these headsets and we are
seeing a significant ramp in orders from these customers. In addition,
we are delighted that we were just awarded a major design win with a
global tier one company for a new AR smartglass for enterprise, which is
on schedule to be released by the end of the year.

“We are very excited that our newest SOLOS™ smartglasses will be
available for shipping beginning tomorrow. SOLOS has been called the
world’s lightest and most advanced AR smartglass for sports and consumer
fitness. It was designed using Kopin’s unique insight into how to
balance style, form, comfort and function for maximum value to athletes.
We are targeting cyclists, triathletes and runners with these
smartglasses, which contain a heads-up see-through Pupil™ display module
so athletes can get real-time updates, such as speed, power and pace,
and measure their progress. SOLOS also includes our Whisper™ Voice Chip
so that users can make phone calls or communicate with others in their
group, benefitting from our unique noise-cancellation technology. SOLOS,
which retails for $499, is available at www.solos-wearables.com
through our ecommerce infrastructure. We anticipate rolling out SOLOS
through other distribution formats during 2018.

“The year has gotten off to a very good start and we are encouraged by
the opportunities ahead for 2018,” concluded Dr. Fan.

First Quarter Financial Results

Effective December 31, 2017, Kopin adopted ASC Topic 606 using the
“modified retrospective” approach, meaning the standard was applied only
to the financial results of the first quarter of 2018 with a cumulative
adjustment to retained earnings. Under this transition method, Kopin
applied the standard only to contracts that were not complete at the
initial adoption date.

Total revenues for the first quarter ended March 31, 2018 were $5.7
million, compared with $4.4 million for the first quarter ended April 1,
2017.

Research and development (R&D) expenses for the first quarter of 2018
were $4.5 million compared to $4.3 million for the first quarter of 2017.

Selling, general and administrative (SG&A) expenses were $6.9 million
for the first quarter of 2018 compared to $5.6 million for the first
quarter of 2017.

Net loss attributable to the controlling interest for the first quarter
of 2018 was $4.8 million, or $0.07 per share, compared with net loss of
$7.9 million, or $0.12 per share, for the first quarter of 2017.
Included in the first quarter of 2018 was $1.0 million from insurance
proceeds and an approximate $3.6 million gain from the exchange of
certain intellectual property for an equity investment.

During the first quarter of 2018 Kopin had 9 patents granted and filed
for 6 new applications. Kopin has over 300 patents and patents pending,
almost all of which are related to wearable applications.

Kopin has maintained a strong financial position. Net cash used in
operating activities for the first quarter ended March 31, 2018 was
approximately $6.1 million. Kopin’s cash and equivalents and marketable
securities were approximately $61.0 million at March 31, 2018 as
compared to $68.8 million at December 31, 2017, with no long-term debt.

“We believe full year revenues will be $35-$40 million,” said Richard
Sneider, Kopin’s CFO. “Similar to last year, our revenues will trend
substantially to the second half of the year, and our goal is to achieve
break even on profitability by the end of 2019.”

The following table shows the impact of adoption of Topic 606 on the
first quarter of 2018 results of operations (amount in millions):

All amounts above are estimates and readers should refer to our Form
10-Q for the quarter ended March 31, 2018 for final disposition.

Brillian, SOLOS, Whisper and Kopin are a registered trademark 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 thatwe will receive
shortly follow-on orders for the F-35 program, which will provide
visibility into military revenues through 2019;the 5,000 FWS-I
eyepieces will be delivered over the next year, beginning in August
2018; our belief that the FWS-C program is tracking on plan; our belief
that the armored vehicle program we won last quarter and was just
expanded to include the development of additional eyepiece scopes
increases the potential total value over the life of the program from
$40 million to $80 million;we were just awarded a major design
win with a global tier one company for a new AR-smart glass for
enterprise applicationswhich is scheduled to be release at the
end of the year; our expectation of follow-on orders on new helmets as
the Brillian LCD microdisplay development continues; our enterprise
customers are reporting seeing good demand for their augmented reality
(AR) headsets; our expectation that at AWE USA 2018 trade show at the
end of May we will introduce our own product targeting the industrial
market;our expectation that the SOLOS smartglasses will have a
retail price of $499; our expectation that we will roll out SOLOS
through other distribution formats during 2018; our expectation that our
revenues for the fiscal year 2018 will be in the range of $35 to $40
million; our goal is to achieve break even on profitability by the end
of 2019; our belief that the year has gotten off to a very good start
and we are encouraged by the opportunities ahead for 2018. 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 either or both the F-35, FWS-I and
FWS-C programs could be cancelled; we may not receive additional orders
for our components for the F-35 and FWS-I programs; we may be designed
out of the F-35 and FWS-I programs; we may not pass qualification of the
FWS-C program; the FWS-I program may not begin to ship in August 2018;
the armored vehicle program may be cancelled; the revenue from the
armored vehicle program may not be in the range of $40 million to $80
million over its life to us; the design win for a global tier one
customer for a new AR-smart glass for enterprise applications may be
cancelled or if developed and commercialized may not provide significant
revenues; we may encounter issues in our Brillian LCD microdisplay
development which may prevent the Brillian LCD microdisplay form
achieving results necessary to make it commercially viable; we may not
receive any follow-on orders for our Brillian LCD microdisplays; our
enterprise customers expectations of demand may be wrong and not occur
which would negatively impact sales of our components to them; we may
not be able to introduce our own product targeting the industrial market
at the AWE USA 2018 show for numerous reasons; SOLOS smartglasses’
retail price is subject to change; we may be unable to roll out SOLOS
through other distribution formats during 2018 due to a lack of demand,
cost, or our inexperience in selling a device like SOLOS smartglasses;
our revenues for the fiscal year 2018 may not be in the range of $35 to
$40 million; we may be unable to achieve break even on profitability by
the end of 2019; and other risk factors and cautionary statements listed
in Kopin’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 31, 2017, and Kopin’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 Kopin and only as
of the date on which they are made. We undertake no obligation to update
any of these forward-looking statements to reflect events or
circumstances occurring after the date of this release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20180508005584/en/

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