Business Context and Reporting Period
Company: Kopin Corporation (KOPN)
Filing Type: Form 8-K (Current Report)
Date of Report: April 28, 2026
Event: Entry into definitive material agreements with Fabric AI, Inc. to jointly develop and commercialize MicroLED-based optical interconnect technology (Neural I/o™) for AI data-center infrastructure.
Key Financial Metrics and Transaction Value
- Development Funding: Fabric AI, Inc. agreed to pay up to $15,000,000 for the development of the Project Technology upon achieving a successful prototype demonstration.
- Initial Payment: An initial purchase order of $5,000,000 is payable within 10 business days of receipt.
- Escrow Requirement: Fabric AI, Inc. must maintain at least $5,000,000 in a segregated account to cover development needs.
- Future Commercialization Funding: Following a successful demo, parties will negotiate a Production Plan expected to include an additional payment of approximately $15,000,000 to $25,000,000.
- Equity Stake: Kopin will receive Series J Convertible Preferred Stock representing 19.9% of Fabric AI, Inc.'s pro forma fully-diluted outstanding shares.
- Dividends: The Series J Preferred Stock carries a 6% per annum dividend rate, accruing daily and payable semi-annually (cash or PIK).
Material Changes and Strategic Developments
This filing represents a significant strategic shift involving a new revenue stream and equity investment, distinct from prior periods which did not include this specific collaboration.
- Joint Development Agreement (JDA): Kopin and Fabric AI will jointly own the Project Technology. Kopin retains exclusive rights to commercialize the technology for government, military, and defense markets, while Fabric AI holds exclusive rights for all other commercial markets.
- Supply Agreement: Kopin is appointed as the exclusive manufacturer of the Products. Fabric AI is the exclusive seller to end users (excluding sanctioned countries and the defense sector). The agreement has an initial term of four years with automatic one-year renewals.
- Anti-Dilution Protection: Kopin's equity stake includes anti-dilution adjustments for up to $50 million in dilutive issuances or conversions by Fabric AI, Inc.
Outlook, Risks, and Contingencies
- Commercialization Contingency: The additional $15M–$25M funding is contingent upon the negotiation of a Production Plan following a "Successful Demo." No guarantee of future payments is provided beyond the initial development funds.
- Manufacturing Obligations: Kopin must maintain sufficient manufacturing capacity. If Kopin fails to deliver 90% of ordered products (excluding force majeure or defense prioritization), Fabric AI may manufacture the products itself.
- Termination Rights: Either party may terminate for material breach (60-day cure period) or immediately upon bankruptcy. If terminated due to Fabric AI's breach or bankruptcy, Kopin retains full rights to the Project Technology.
- Control Restrictions: Fabric AI, Inc. is restricted from acquiring more than 9.9% of Kopin's voting securities or seeking control of Kopin for three years post-termination.
Investor Verification Checklist
- Verify the receipt of the initial $5,000,000 purchase order and the establishment of the segregated funding account.
- Confirm the specific technical milestones and timeline defined in the "Development Plan" required to trigger the "Successful Demo."
- Review the terms of the Series J Convertible Preferred Stock, specifically the conversion mechanics and the cap on anti-dilution adjustments ($50 million).
- Assess Kopin's current manufacturing capacity against the potential volume requirements of the "Ramp-Up Plan" to be finalized within one year.
- Monitor the negotiation status of the Production Plan post-demo to determine the likelihood of the additional $15M–$25M funding.