Kopin Provides Business Update and First Quarter 2019 Operating Results

• Begins Shipping Displays to Fulfill Order from Tier One Enterprise
  Customer
• Completes Equity Offering raising approximately $8.8 million (A)
• Ongoing Program to Reduce Cost Structure, Streamline Active Product
  Programs

WESTBOROUGH, Mass.–(BUSINESS WIRE)–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 ended March 30, 2019.

“We began the year with a number of developments that we believe point
to 2019 as a strong year for adoption of augmented reality (AR) by
enterprises,” said Dr. John C.C. Fan, CEO of Kopin. “We recently
received a significant follow-on purchase order for displays from the
leading Tier One U.S. customer we discussed in our review of our 2018
fourth quarter results. In addition, other Kopin customers have
announced design wins for industrial headsets deployed globally across
various vertical markets, including aviation, consumer packaged goods,
and autos. We believe Kopin is the largest provider of micro-displays
sold into the enterprise market segment and the strength of this
forecasted demand puts us on track to more than triple the number of
micro-displays shipped this year to enterprise customers. At the same
time, our military business is meeting key development milestones and
all of our major programs performed in line with expectations: F-35
Fighter Jet program; FWS-I and FWS-CS; and the new armored vehicle
program. Finally, the $150 million OLED fabrication facility being built
by our partner BOE is on schedule. With OLED capacity coming on line in
the second half of this year we look for the supply to stimulate demand
for consumer AR/VR applications.”

Dr. Fan continued, “Operationally we have taken steps to improve our
financial position. In addition to raising approximately $8.8 million of
cash in an equity offering to strengthen our balance sheet, we are
assessing the current status of the wearables market, and in response
have narrowed our various product strategies. We have discussed
previously that many of our technologies and product development
programs have reached the harvest stage and as such we have consolidated
certain activities and taken write-offs, even as we continue to actively
explore different commercialization strategies for our technologies,”
concluded Dr. Fan.

First Quarter Financial Results

Total revenues for the first quarter ended March 30, 2019 were $5.5
million, compared with $5.7 million for the first quarter ended March
31, 2018.

Cost of product revenues were $5.9 million for the first quarter
ended March 30, 2019, compared with $4.1 million for the first quarter
ended March 31, 2018. Included in cost of product revenues for Q1 2019
is a $1.2 million write-off of excess inventory.

Research and development (R&D) expenses for the first quarter of 2019
were $5.0 million compared to $4.5 million for the first quarter of
2018. Included in R&D for the quarter ended March 30, 2019 is $0.5
million of materials associated with development programs that are being
curtailed.

Selling, general and administrative (SG&A) expenses were $6.3
million for the first quarter of 2019 compared to $6.9 million for the
first quarter of 2018.

Net loss attributable to the controlling interest for the first quarter
of 2019 was $11.3 million, or $0.15 per share, compared with net loss
of $5.5 million, or $0.08 per share, for the first quarter of 2018.
Included in the first quarter of 2018 was $1.0 million from insurance
proceeds and an approximate $2.8 million gain from the exchange of
certain intellectual property for an equity investment.

In March/April, 2019 the Company sold approximately 8.0 million shares
of registered common stock for gross proceeds of approximately $8.8
million to improve financial flexibility and strengthen its balance
sheet. Net cash used in operating activities for the first quarter
ended March 30, 2019 was approximately $7.8 million. Kopin’s cash and
equivalents and marketable securities were approximately $36.9
million at March 30, 2019 as compared to $37.2 million at December 29,
2018, with no long-term debt.

During the first quarter of 2019 Kopin had five patents granted and
filed six new applications. Kopin has over 300 patents and patents
pending, almost all of which are related to wearable applications.

All amounts above are estimates and readers should refer to our Form
10-Q for the quarter ended March 30, 2019, for final disposition as well
as important risk factors.

(A) Includes exercise of overallotment which occurred on April 10, 2019.

Conference Call

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
at www.kopin.com.

Forward-Looking Statements

Statements in this press release may be considered “forward-looking
statements” within the meaning of Section 27A of the Securities Act of
1933, as amended (the “Securities Act”), and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), which
are subject to the safe harbor created by such sections. Words such as
“expects,” “believes,” “can,” “will,” “estimates,” and variations of
such words and similar expressions, and the negatives thereof, are
intended to identify such forward-looking statements. We caution readers
not to place undue reliance on any such “forward-looking statements,”
which speak only as of the date made, and advise readers that these
forward-looking statements are not guarantees of future performance and
involve certain risks, uncertainties, estimates, and assumptions by us
that are difficult to predict. Various factors, some of which are beyond
our control, could cause actual results to differ materially from those
expressed in, or implied by, such forward-looking statements. All such
forward-looking statements, whether written or oral, and whether made by
us or on our behalf, are expressly qualified by these cautionary
statements and any other cautionary statements that may accompany the
forward-looking statements. In addition, we disclaim any obligation to
update any forward-looking statements to reflect events or circumstances
after the date of this press release, except as may otherwise be
required by the federal securities laws. These forward-looking
statements are only predictions, subject to risks and uncertainties, and
actual results could differ materially from those discussed. Important
factors that could affect performance and cause results to differ
materially from management’s expectations are described in Part I, Item
1A, Risk Factors; Part II, Item 7. Management’s Discussion and Analysis
of Financial Condition and Results of Operations; and other parts of our
Annual Report on Form 10-K for the fiscal year ended December 29, 2018,
as updated from time to time in the Company’s Securities and Exchange
Commission filings. These factors include: our belief that 2019 may be a
strong year for adoption of augmented reality by enterprises; our belief
and estimate that the strength of the forecasted demand for displays
puts us on track to more than triple the number of displays shipped this
year to enterprise customers; our expectation that OLED capacity coming
on line in the second half of this year will stimulate demand for
consumer AR/VR applications; our ability to obtain raw materials and
other goods as well as services from our suppliers as needed; our intent
to continue focusing our development efforts on proprietary wearable
computing systems; the potential for customers to choose our competitors
as their supplier; our expectation that we will have negative cash flow
from operating activities in 2019; our ability to prosecute and defend
our proprietary technology aggressively or successfully; our ability to
retain personnel with experience and expertise relevant to our business;
our ability to invest in research and development to achieve
profitability even during periods when we are not profitable; our
ability to continue to introduce new products in our target markets; the
degree to which our wearable technology is embraced by consumers and
commercial users; our ability to develop and expand our wearable
technologies and to market and license our concept systems and
components; our ability to generate revenue growth and positive cash
flow, and reach profitability; the strengthening of the U.S. dollar and
its effects on the price of our products in foreign markets; the impact
of new regulations and customer demands relating to conflict minerals;
our ability to obtain a competitive advantage in the wearable
technologies market through our extensive portfolio of patents, trade
secrets and non-patented know-how; our ability to grow within our
targeted markets; smartphone makers’ intent to create products that work
as a complement to smartphones or that will eventually replace
smartphones with more convenient configurations; the importance of small
form factor displays in the development of military, consumer, and
industrial products such as thermal weapon sights, safety equipment,
virtual and augmented reality gaming, training and simulation products
and metrology tools; our ability to successfully offer and market our
SOLOS smart glasses directly via the Internet; the suitability of our
properties for our needs for the foreseeable future; our expectation not
to pay cash dividends for the foreseeable future and to retain earnings
for the development of our businesses; our expectation that we will
expend between $1.5 million and $2.0 million on capital expenditures
over the next twelve months; if we do not soon achieve and maintain
positive cash flow and profitability, our financial condition will
ultimately be materially adversely affected, and we will be required to
reduce expenses, including our investments in research and development
or raise additional capital; our ability to support our operations and
capital needs for at least the next twelve months through our available
cash resources; our expectation that we will incur taxes based on our
foreign operations in 2019; and our expectation that we will have a
state tax provision in 2019.

Contacts

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