Thank you. Good afternoon, everyone. Before we get started, I'd like to remind everyone that during today’s call taking place on Thursday, November 9, 2023, we will be making forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on the company's current expectations, projections, beliefs, and estimates and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Potential risks include but are not limited to, demand for our products, operating results of our subsidiaries, market conditions, and other factors discussed in our most recent annual report on Form 10-K and other documents filed with the Securities and Exchange Commission. Although the company believes that the assumptions underlying these statements are reasonable, any of them can be proven inaccurate and there could be no assurances that the results will be realized. The company undertakes no obligation to update the forward-looking statements made during today's call. In addition, references may be made to certain non-Generally Accepted Accounting Principles or non-GAAP measures for which you should refer to the appropriate disclaimers and reconciliation in the company's SEC filings and press releases. Kopin Corporation's Chief Executive Officer, Michael Murray will begin today's call with an overview of Kopin's progress within the company's strategy. Following Michael, Kopin's CFO, Rich Sneider will review the company's third quarter results. I would now like to turn the conference call over to Michael Murray.

Thank you, Quinn. Good afternoon to everyone and welcome to our third quarter earnings call. I want to start with a brief explanation for rescheduling our call. A technical accounting issue was raised on revenue recognition of a development contract that required additional research to ensure proper accounting and was resolved earlier today. Moving on, I would like to welcome David Nusma, who joined our Board of Directors this week. David joins us from Collins Aerospace, where he spent over 32 years in several key senior leadership roles and is a former Air Force officer. He understands our customers, our technology, and our culture deeply. We welcome David to the team and believe he will be a great asset for Kopin and our shareholders. Now I'm proud to announce that we've made significant progress on our transformation plan and turned in $10.6 million in revenue for the quarter. Our fourth consecutive positive book-to-bill quarter at improved margins. Turning to our first strategic initiative, building the backlog, in the third quarter of 2023, we booked follow-on orders of approximately $12.8 million, $3.4 million, and a $1.9 million NRE order, as well as several smaller orders, which resulted in a book-to-bill ratio of approximately two to one for the quarter. We believe this is a record order level for Kopin over the last 10 years. Our continually growing order book translated into good third quarter revenues at $10.6 million as compared to $11.7 million for the third quarter of 2022. Our industrial revenue was down $1.4 million year-over-year due to continued weakness in the 3D automated test market, specifically in China. I'll now introduce Kopin to those who might be less familiar before diving more deeply into the events of the last quarter. Kopin is the only U.S. manufacturer of human-centric AR and VR application-specific optical solutions and micro displays used primarily to provide situational awareness for warfighters, for surgeons and gamers alike. You can find our solutions in weapon sites, armored vehicles, pilot helmet visors, and soon, surgical head-mounted displays. The heart of these visual systems and solutions is composed of a micro display no larger than the human thumb. Kopin offers four different types of micro displays, our proprietary AM LCD, FLCOS, OLED, and micro LEDs, which are the absolute cutting edge of display technology. Kopin is the vanguard of this technology and has developed a monochrome micro LED and has a color version within reach. If a micro display is the heart of our application-specific optical solutions, then the software that controls the knobs of the solution, that's the brain. Software will be critical to the next stage in Kopin's growth as we adapt our technologies to each individual's unique user. Indeed, our new mission is to adapt technology to the user and not force the user to adapt to the technology. This compares to companies that require users to insert specialized lenses into their displays or systems to adapt that person's vision to the device. Software and artificial intelligence are new endeavors for Kopin and we recognize that we lack certain capabilities to tackle these on our own. This recognition has led Kopin to partner with MIT's CSAIL lab. This lab is the premier institution of technology and AI development. With this partnership, Kopin is looking to augment our internal software capabilities and to turbocharge our firmware powering all of our products and ultimately resolve the AR-induced nausea that currently troubles users by allowing those knobs of the display to be turned either automatically or by the user. Custom optics and ruggedized solutions and housings are the eyes and skeletons of an application-specific solution. Arrays of custom optical lenses need to work harmoniously with the rugged housing to transmit crystal clear images produced by our micro displays. And that is where Kopin's expertise shines. The pairing of micro displays, optics, housings, and firmware continues to progress our application-specific solutions far from where we began. But as I mentioned, empowering software and algorithms will drive Kopin into the future. What is missing from this anatomical pairing is the optical nerve that transmits to the brain or the software in this case, what the eyes see and what the user needs from the display to reduce eye fatigue, nausea, and enhance the user experience. Kopin has the solution to bridge this gap and enable AR and VR marketplaces. We recently patented a revolutionary new display architecture that will be embedded within what we refer to as our neural display. This architecture will feature a non-standard RGB pixel setup as in OLED or micro LEDs, but we've added several other elements including sensors that relay to the firmware what is happening with the user's situational environment, their ergonomics, and their eyes. As an example, are the user's eyes dilating quickly, implying that they're in a state of fight or flight? In that case, the display's brightness should go down quickly and contrast must increase. Conversely, if the eyes of the user are reverting normally, the display should react in the opposite direction. This complete chain of heart, brain, optical nerve, eye, skin, and skeleton provides the framework that we will allow the future realization of augmented reality's yet unfulfilled promise. Other companies have their own approach to monitoring the status of a user's eyes that rely largely on an array of cameras pointed back at the user. Our approach incorporates sensors within the display itself, which has the benefit of reducing size, weight, power consumption, design complexity, and ultimately cost. We'll provide more information on this platform and our partnerships to deliver it to the market very soon. Now, turning to the third quarter, we announced a follow-on order for one of our IP subassemblies to a Department of Defense prime contractor that integrates our IPs into a very sophisticated augmented reality module. This $12.8 million follow-on order represents a significant increase in year-over-year volume and revenue from the strategic customer, and we expect significant additional orders shortly for the same product. The order is scheduled for delivery in 2024, but we can deliver earlier if we're able to procure the necessary raw materials. If we receive this expected additional demand, Kopin will potentially ship triple the volume of weapon sites within the calendar year of 2024. If so, we do not require additional machinery in our plant, but we may need to take additional steps to prepare and potentially reconfigure the production line and subsequently clean it in this quarter to support the significant increase in volume and demand. These orders are a result of improved customer relationships, program management focus, and the dedication to improving on-time in full processes, and a great customer who has been very patient and supportive of our transformation plan. We also received a $3.4 million follow-on order for our high brightness liquid crystal display for the F-35 Joint Strike Fighter program. With the F-35 scheduled for production through 2030, we expect additional orders over the program's life. This follow-on order extends our backlog of scheduled deliveries into the fourth quarter of 2024, providing steady production rates. As we previously stated, the F-35 helmet is scheduled to transition to an OLED display. We're also in the process of finalizing that required production tooling and contractual agreements to support that transition. Now, turning to our ongoing armored vehicle program, we've been told by General Dynamics that Kopin’s weapon site program developed under the Step 4 upgrade will continue as planned since our system reduces size, weight, power consumption, while improving accuracy. We are progressing well against our PPAP milestones and continue to engage with General Dynamics on opportunities for the platform to be integrated into previous upgrade packages and into light armored vehicle programs as well. Now, I've said in the past, this year's focus is on returning the operation to cash break-even levels as a milestone of our transformation plan, and we've progressed well against that milestone in Q3. We approach closer to this milestone by improving margins and closely scrutinizing R&D and SG&A, spending by continually focusing on what we can control and deliver, and we expect to deliver solid margins and the growth our investors look for. We now have the contracts in place for solid revenue growth, and our goal remains to become a more predictable and profitable firm in the coming year. I'll now turn the call over to our CFO, Rich Snyder, to review our results in further detail. Over to you, Rich.

Thank you, Michael. Turning to our financial results, total revenues for Q3 2023 were $10.6 million versus $11.7 million for the prior year, a 10% decrease. Product revenues for the first quarter ended September 30, 2023, were $5.5 million compared with $8.3 million for the third quarter ended September 30, 2022. The decrease in product revenues was driven by a $1.7 million or 82% decrease in industrial revenues over the prior year due to continued weakness in the Chinese 3D automated test market. Defense revenues decreased $800,000 or 14% year-over-year. The decrease relates to the conclusion of the current purchase order and beginning of the next purchase order. Funded research and development revenues were $5.1 million for the third quarter of 2023 compared with $3.5 million for the third quarter of 2022, a 47% increase. The increase in funded R&D was due largely to a $1.9 million order related to a thermal weapon site program. Cost of goods sold for the third quarter of 2023 was $5.4 million or 99% of product revenues compared with $8 million or 97% for the third quarter of last year, essentially flat. R&D expenses in the third quarter of 2023 were $3.1 million compared with $3.4 million during the third quarter of 2022, a 10% decrease year-over-year. Funded R&D expenses for Q3 2023 were $2.3 million as compared to $1.8 million for Q3 2022, which was driven by higher funded R&D revenue. Internal R&D expenses for Q3 2023 were $744,000 as compared to $1.6 million for the third quarter of 2022. This reflects the rationalization effort Michael spoke about. SG&A expenses were $4.8 million for the third quarter of 2023 compared to $4.3 million in the third quarter of 2022. The SG&A increases for the three months ended September 30, 2023 as compared to the three months ended September 2022 were primarily due to an increase in legal expenses and non-cash stock compensation expenses of approximately $1.7 million for the third quarter of 2023 as compared to $500,000 for the third quarter of 2022. These increases were offset by a decrease in compensation and benefit costs of $1.3 million for the third quarter as compared to $2 million for the third quarter of 2022. Other income was approximately $316,000 for the third quarter of 2023 compared with an expense of $2.1 million for the third quarter of 2022. In the third quarter of 2023, we had foreign currency losses of $14,000 as compared to a loss of $112,000 in Q3 2022. Also in the third quarter of 2022 we recorded non-cash mark-to-market impairment on an equity investment of $2 million. Turning to the bottom line. The net loss attributable to Kopin during the third quarter was approximately $2.5 million or $0.02 per share compared with $6.1 million or $0.07 per share for the third quarter of 2022. As Michael mentioned in his opening remarks, when removing the litigation costs and non-cash items we were very close to cash break-even. Net cash used in operating activities for the nine months ended September 30, 2023 was approximately $11.8 million. Kopin’s cash and marketable securities were approximately $21.7 million at September 30, 2023 as compared to $12.6 million at December 31, 2022. We have no long-term debt. The amounts discussed above are based on our current estimates, and listeners should review our Form 10-Q for the quarter ended September 30, 2023 for any possible changes and of course any additional filing. And with that I'll turn the call back over to Michael for closing remarks.

Thanks, Rich. As evidenced in our third quarter results, our focus continues to be on strengthening our record order book, achieving higher on-time and full rates, cost controls and making the strategic investments in products and people which in the aggregate will improve cash flow and provide long-term sustainable profitability and growth. We've also been working very hard on our brand, external marketing and website development efforts and we are ecstatic to announce that we will have a new website to debut very shortly. Looking forward, we are very fortunate to have world-leading and market-making customers who are supporting Kopin during this transformational period. We have put tremendous focus on working with our customers to move up the value chain and gain more share of their system and spending. Furthermore, we have carefully selected new strategic partners and customers to work with and are focused on new opportunities and projects which support our strategic plan. To this end, our opportunity pipeline has grown substantially in the past few quarters. We expect several new customers, partners and project awards and announcements soon which will add modestly to our order book but more importantly will fuel larger returns in the future as these new projects move into production. Perhaps the most culturally important transformation is that Kopin remains focused on invention and innovation but with more focus on cost controls and return on investment. These new inventions discussed today will help drive our innovations that solve our customers' most difficult technical problems and serve as the bedrock of our business which will fuel our long-term sustainable growth for our employees, customers and stakeholders. Thank you everyone for your time today and for showing interest in Kopin. I'd like to thank our employees, customers and stakeholders for their continued hard work and support and dedication and with that operator I'd like to offer some time to take some questions.

Okay, your first question comes from Glenn Mattson from Ladenburg. Your line is open.

Yes, hi, thanks for taking the questions guys and congrats on the quarter especially that strong book-to-bill.

Thanks, Glenn.

So curious I guess on the just trying to think about how to how you expect it to kind of play out. I did I realize you have this strong $12.8 million thermal weapons order. I saw one of your customers announced a couple days ago they got a large purchase order as well. So I imagine that's where the follow-on order that you're talking about might come from and you mentioned that you may need to do some kind of retooling or whatever the fab. So would that mean downtime in the equipment would that would there be like a hiccup in the revenue line and as you ramp that up and if and you talked about it maybe in this quarter but it sounds like it's going to come at some time or another or just can you just flush out how to best think about that better, Michael?

Sure, so we are expecting additional orders for our thermal weapons site program within the quarter and if those orders are received I believe that we'll have to take some time and reconfigure the fab, clean it and make sure that the bays are operating at the highest levels to be able to extend that throughput. So that's what we're expecting but we have not seen that follow-on orders yet.

Okay and I guess and so that downtime would lead to some modest obviously it's a good problem to have but maybe a little bit of a lumpiness in terms of the way the revenue comes through?

We think so. It's possible this quarter we would have to do it this quarter to make sure that we're running at full optimization in January, but we wouldn't require any additional large capital expense for machinery. It would just be strictly downtime to move some things around and put in the additional jigs and test benches that we would need. But in a clean room as you know once you start moving things around you want to make sure that you do it and then clean it thoroughly so that would just be downtime with the fab.

Right, right, okay. Thanks for that, color. And then I just want to hear a little bit more about the new display architecture that you touched on. I think it's the first time we heard about it where you use sensors to kind of get feedback from the user to kind of balance out any whatever type of motion sickness or disruptions he's having when using you know an AR or VR device or whatever. So it's an interesting approach. Can you just talk about how you came to kind of come at it from this angle? And you know I guess there's a lot of different people trying to skin this cat in different ways so what makes you think that you know this is the best approach to go with and just a little more history on how you got to this point and how long you think it will take to develop?

Sure. So I visited many consumer companies here in the United States and just as many defense companies that are all struggling with the same phenomenon which is the nausea that some of these systems create. And what I learned was that putting perfect displays in front of imperfect eyes and by the way my eyes are imperfect from my right to my left. So putting two perfect displays in front of my eyes actually makes me feel nauseous. So when we think about AR we have to make sure that the technology adapts to the human and not force the human to adapt to the technology and that's why it's not working. Because essentially the way that you view video specifically and the way I view video is very different and that's what led us to believe that the display has to change. And the display architecture itself isn't going to change that much but when we looked at the overall system architecture we realized that there were efficiencies to be made by adding sensors. If you look at my background I spent a decade at analog devices running their high performance sensing group. There was lots of ways that we could improve that and also some of the covenants that these devices have broken in consumer electronics size, weight, power consumption, user adaptation, those are things that are getting AR adoption rates right now. So we took that challenge. We came up with what we call the neural display which is an AI powered display and a software-defined backplane which Glenn we already have by the way. Many of our backplanes are already software-defined. So we have this capability and we think that we can solve the problems in the AR VR marketplace by those sensor fusion activities that we're embarking upon now. We're developing some partner networks and partnerships to help us get there. More on those later.

Thanks for the additional time. I look forward to hearing more about it as it progresses. Thanks, guys.

You bet. Thanks.

Your next question comes from the line of Kevin Dede from H. C. Wainwright. Your line is open.

Hi Michael, Rich. Thanks for having me on.

Hi Kevin.

Yes, yes. I'd just like to piggyback off Glenn's question. Right. I get the neural display. Appreciate the detail you've offered on it. Understand your prepared remarks noted a patent. Maybe you could talk a little bit about that. And maybe you could talk given your analog device and sensor experience and that sensor capability already or software capability already embedded in the backplane. Maybe you can talk a little bit about including sensors, the timeline to prototypes and when you think you might be able to get stuff into people's hands.

Great question. Thanks Kevin. So I'll be focused on this in two ways to answer your question. Number one, the architecture itself has been patented. We have five patents submitted currently. There's a sixth patent that we are submitting shortly. And we believe that those patents are going to be the foundation for where the neural display is going to come from. We've been working with one very large micro display company. And we're looking for support from them. We're trying to create an organization with those folks for the consumer market. We're also looking at go-to-market activities with the defense market and with a specific office in the United States Department of Defense to enable this technology as well. Next year we're looking at potential funding lines from not only our consumer companies and customers, we're also looking at potential funding from U.S. DOD applications as well as potentially some congressional money that we've applied for. So that's where the money is going to come from to support this technology development. And when we see the money come in, we'll see how quickly we can get this in the hands of folks, specifically in the consumer marketplace where we have tremendous demand currently.

Okay, maybe I need to take a different tack on the questioning line, Michael. So please excuse me.

Sure.

Obviously you feel comfortable with the technology development. But how do you think we should look at timelines for you to get a display that incorporates your sensors and you might be able to serve as physical evidence for customers?

Yes, I think we have a pretty targeted approach in that area. I'm going to defer the question for proof-of-concept samples until a few more NDAs get signed.

Okay, fair enough. Fair enough. Thank you.

I wish I could give you a better answer, Kevin, but I'll defer for now.

Well, it's just incredibly exciting, and I don't know of anyone that's approaching, to paraphrase Glenn, skin in the cat this way. So congratulations on that development.

Thank you.

Pretty strong sequential growth in research and development revenue, and up markedly from sort of the past five or six quarter trend. And I was wondering if you could talk to that a little bit. Is that multiple projects, a big lump in one particular project?

Yes, Kevin, as we mentioned in our prepared remarks, we delivered on a $1.9 million contract in the quarter, so it was a fairly substantial.

Okay. So I guess you met all your deliverable specifications and you could recognize revenue. Does that mean that project's done?

Yes.

Okay. Can you give us a ballpark on, I guess, maybe other sort of the span of different DOD development projects you have that might go from LRIP to full production next year?

Well, I'm not sure I understand the question. I mean, FWSI, F35, all those were several years in development than LRIP. We're working on the color LED program. That's already been two or three years in the making and so on and so forth. So these are fairly long development cycles.

Okay.

But we'll say, Kevin, just to add some color to that. I do expect our armored vehicle program to move through PPAP next year, and we expect orders next year that we want to start shipping in terms of production. So once it gets out of PPAP, it basically goes into low-rate initial production pretty much right away. We're expecting orders for that in 2024. I don't know if we'll be able to deliver in calendar 24, but that's the goal.

Would that be moving from PPAP to LRIP? Is that an event you might announce?

Indeed.

Okay. Because if I remember the June call, you mentioned that you should have better insight into the development of that project later this year, which sort of thinking is now. Was there some delay there or is it just bureaucracy?

So the SEP4 upgrade has been effectively canceled to my understanding. And General Dynamics has been gracious enough to speak with us and provide details of what their plans are, which I can't get into on this call. However, what I can say is we are continuing the PPAP process. They're very excited about the technology. We're talking about new platforms and old upgrades that we could potentially utilize this technology for. So we're all ahead full steam. So that was great news. And that was what I was worried about in the last call is I wasn't sure what the SEP4 upgrade schedule was going to look like, although I couldn't say anything. But I can now. So that was the reason for, I'd say, the lack of information on the last call.

Okay.

Hope that helps.

Yes. Yes, yes, yes. A couple more, if I may. The transformation that you've been working so hard on, I would have thought would begin to show in product margin, but it's not so evident. And so maybe you could help me reset my expectations on timing.

Kevin, I think it's important to understand that we have multiple sources of revenue, but we have limited resources. And so it's always a guns and butter, bad pun analogy. If you take our source of revenue, product revenue and funded R&D, and you subtract cost of sales and funded R&D expense, our gross margins this year, year-to-date, is about $7.8 million, which is a 150% increase over the prior year. So that's how we don't just look at the gross margin of the product, because in many respects, the FAB is dual function. And so that's one of the things that's got to be done. We've got to manage both aspects of it. They're all running through the same facility. We have an engineering group. So that's how we're looking at it. The overall absolute dollars have increased by 150% over the prior year to nine months.

And I'll add to that, Kevin. It's an important question. And one of the things that we've been messaging is our old existing contracts where we're sole source and we're on firm fixed prices, those are either running out or ending. And we're replacing them with new contracts with new pricing that is more advantageous for Kopin and I think you'll see a gross margin lift there because we did have conversations with our customers around price increases due to inflation, due to scope creep, due to lots of different things that have happened over the course of the last few years. And as we reported in the remarks today is that we did increase prices on several programs.

A past report. So thank you, gentlemen. The other thing I'm wondering, I guess, just from sort of a cash use perspective was that inventories are up and I'm just looking sequentially, Rich. Inventories are up, contract assets are up. And I'm wondering if you're building in advance of the FWSI and the F35 production.

Yes. So the contract assets are up. We completed, as you saw, funded R&D. Revenue was up in the quarter. We completed it. That's associated with the receivables that we need to collect on those assets. But yes, I mean, inventory is up because of the projected growth for next year. So the reality is lead times are still out there for many of the parts that we need, FPGAs and things like that. And so we're getting in what we can when we can get it to make sure we have good production.

Okay. Gave us an update on Abrams, an update on FWSI, an update on the F35. But how about the...

Rolling along.

Okay. Are those things what is contributing to your backlog? And how would you compare your backlog at the end of September versus the end of June?

So it's a really interesting question. We have historically been very conservative and said that backlog, as our understanding of the definition, is that it is non-cancellable. And so to the extent that we have purchase orders, which historically we've allowed companies to either move to the right or, frankly, never take delivery, we don't include those in backlog. But if you look at our footnotes, which should be filed in our 10-K tomorrow, you'll see performance obligations are up, which is a proxy for backlog. But that number, technically, we have more orders than we're actually showing there. But as I said, we don't put things there that, frankly, some of them are.

Are you saying they have increased compared to June rather than September 22?

Yes.

Well, thank you, gentlemen, for indulging me. Sorry if I pushed it too far, but I really appreciate you working with me on it. Thank you.

No problem, Kevin. Thank you.

Your next question comes from the line of Victor Santiago from Stifel. Your line is open.

Hi, guys. Thank you for taking my questions and congrats on the quarter. Just on the nice gross margin improvement, was there anything in particular that drove the sequential improvement, or is that just a function of your ongoing improved execution? And also, is that level sustainable on a go-forward basis, or could we see that fluctuate a bit in the near term?

It is a function of price increase, and we have been able to drive raw materials costs down. It will fluctuate based on mix, because as Michael indicated, some products we're still rolling out, and we don't have the new prices associated with them yet. So we probably won't really achieve good stability until the first quarter of next year. And then after that, we would expect to see consistent progression quarter to quarter.

Got it. Thank you. And then just, I guess, lastly, I'm hoping to get your updated thoughts on the timeline of the ongoing lawsuit. Are you guys still expecting similar elevated legal expenses in Q4 and into Q1? And then also, is the trial still set for Q1?

Yes. The trial is currently set for late January. There's a couple of events that will occur in the early part of December, and so we may see a slight elevation in expense in December, not to the level that we had in Q2, though. And then, frankly, in eight to ten weeks, hopefully we have a very positive answer.

Got it. Thank you. And that's all I had. Thanks, guys.

Thanks, Victor.

There are no further questions at this time. I'll now turn the call back over to Michael Murray for any closing remarks.

Thank you, Operator. To everyone that joined, thank you very much for your interest in Kopin. To our friends, family, investors, customers, happy holidays, and we look forward to seeing you at our next conference call. Take care.

This concludes today's conference call. You may now disconnect.