What Kopin Corporation told the SEC could break it.

Kopin is heavily customer-concentrated: DRS Network & Imaging Systems accounted for ~62-63% of 2025 revenue (65% in 2024) and 41% of gross accounts receivable, with Collins Aerospace (9-11%) and Army Contracting Command (32% of AR) also major; defense customers were 74% of total revenue, so loss of DRS, cancellation of U.S. Government contracts, or failure to secure purchase agreements from major customers would materially reduce revenue.

“Key risks include dependence on major customers, such as DRS Network & Imaging Systems LLC comprising 63% of revenues in 2025 and therefore posing a concentration risk.”

Kopin's manufacturing depends on outside foundries: it relies on a Taiwanese foundry for the integrated circuits used in its AMLCD display products and on Chinese, Korean and European foundries for its OLED displays, and on third-party contractors for critical raw materials (special glasses, wafers, chemicals, backlights); any supply interruption, capacity constraint or quality failure at these limited/sole-source foundries and suppliers could materially harm its ability to produce displays and meet defense-program demand.

“wanese foundry for the manufacture of integrated circuits for our AMLCD display products and on Chinese, Korean, and European foundries for our OLED display products.”

Kopin issued Series A Convertible Preferred Stock (e.g., to Theon) that is redeemable at the holders' election — and therefore classified outside permanent equity as a potential cash/redemption obligation — with conversion at $3.00 initial price (subject to a 9.99% ownership blocker) and possible forced conversion; as a small, historically loss-making company, reliance on such convertible-preferred financing creates dilution and liquidity risk.

“Redemption— The preferred stock is redeemable at the election of the holders and is therefore classified outside of permanent equity.”

Kopin is exposed to trade policy: U.S. tariffs on components imported from China (and possible exposure through Taiwanese foundries that do parts of manufacturing in China) have in some cases raised, and may further raise, its expenses and hurt profitability, while U.S. Department of War (DoW) source-of-supply requirements are pushing it to transition OLED deposition steps to European partners to reduce Chinese-supply and tariff risk; the February 20, 2026 Supreme Court ruling striking down certain IEEPA tariffs leaves the tariff outlook uncertain.

“Tariffs on components that we import from China or other nations that have imposed, or may in the future impose, tariffs have in some cases and may in the future cause our expenses to increase, which would adversely affect our profitability”