Thank you for holding, ladies and gentlemen. You are on the line for Kopin's first quarter 2022 earnings call. At this time, we are still gathering additional participants. We will get started momentarily. We thank you for your patience and ask that you please continue to hold. Ladies and gentlemen, please stand by. We're about to begin. Good day and welcome to Kopin's first quarter 2022 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Richard Sneider, Chief Financial Officer. Please go ahead, sir. Thank you, operator. Welcome, everyone, and thank you for joining us this morning. John will begin today's call with a discussion of our progress in executing our strategy, and then I will go through the first quarter of 2022 results at a high level. John will conclude our prepared remarks, and then we'll be happy to take your questions. I'd like to remind everyone that during today's call taking place on Tuesday, May 3, 2022, 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. The company undertakes no obligation to update the forward-looking statements made during today's call. With that, I'll turn the call over to John. Thank you, Richard. Good morning, and thank you all for joining us to discuss our first quarter results of 2022. I am speaking from Hong Kong this evening, which is 12 hours ahead of Boston time. Hopefully my phone connection is good. I must say, I'm very happy to be able to travel again and to meet with customers, which is so important in developing our business. On my way home, I will be swinging by the 2022 Society for Information Display, or SID trade show, which is taking place in early May in San Jose. Turning to our formal business. We are pleased with the results of the first quarter of 2022. Overall, year-over-year revenue was flat as our product sales were lower, but were offset by our strong funded research and development revenues. Our product revenues were affected by the global supply chain issues, particularly during the last couple of weeks of the quarter. As a result, we're 12% or 14% lower than Q1 of last year. In the past few quarterly earnings calls, we have mentioned our concern of the global supply chain production issues. While 14% year-over-year decline in product revenues is not something that we're pleased with. Given the circumstances we are now, we're also not discouraged by it. Demand for our products remains strong. Let me explain why this issue is challenging to deal with. Because we make very complex components and assemblies which go into extremely sophisticated, interdependent defense and industrial systems. We cannot simply switch a component that ensures supply with another component. When we identify issue and see a need to switch to a different component, we must notify our customer, explain our plan, in most cases, have to obtain their formal approval. We must perform extensive testing on our revised product to ensure its compliance with the specifications and provide the testing results to our customers for their review. Our customer may be required to perform extensive system testing and obtain their own customer's approval. This process is time-consuming, and it means that in addition to our normal development activities, we must allocate resources to identify replacement components and perform additional testing. In spite of all this, we were able to achieve relatively high level of manufacturing while allocating resources to address these historic issues and also make progress in our development activities, which are really crucial to our long-term growth. That's why overall, we are satisfied with the first quarter results. We continue to actively manage the serious supply chain issues. While we expect intermittent supply chain disruptions of some of our materials, we will have sufficient components to continue our 2022 growth over 2021. As we previously discussed in the fourth quarter in 2021, we announced new orders of our current production program, F-35, and our major weapon sight program. This gives us a strong foundation for 2022 product revenues. Looking out into the future of our current programs, we've received feedback that the very unfortunate situation in Ukraine may eventually result in more product demand. Turning to our organic light-emitting diode or OLED product line. Our recent press release indicated we're making good progress in building this business. As discussed in the press release, we received production orders for our 720p Lightning OLED microdisplays. In other cases, a foundry customer is buying our 2K OLED wafers, which are the fundamental building block to make OLED display. We believe these two new orders are testimony to the competitive advantage of a highly advanced silicon backplane design and display performance, and also validates the power of fabless business model. Under our model, we either sell finished OLED displays to our customers by working with our OLED foundry partners, or we sell our highly advanced proprietary backplane wafers to our OLED OEM partners who complete the microdisplays for sale to their own customer base. This business model provides us a lot of flexibility to meet customer demands without incurring the major fixed capital investment associated with the OLED deposition process. We continue to work on design wins with other new customers. Regarding our research and development programs, we continue to make excellent progress on our customer-funded defense development programs, which include armored vehicle targeting systems, rotary-wing aircraft pilot helmets, and additional weapon sight programs. We expect the rotary-wing program to go to production in the second half of this year, and the armored vehicle program to go to production after 2023. Perhaps it is important to point out the breadth of the scope of our defense business. As a reminder, Kopin provides advanced microdisplays, optics, and rugged dust-free assemblies. For fighter jets, such as F-35 or rotary-wing aircraft, we provide displays. For gun sights, we provide displays, optics, and module assemblies. Now, for armor vehicles, we actually provide the whole full system units. They include displays, optics, electronics, et cetera, et cetera. Currently, all our defense business and enterprise business are based on our advanced LCD on silicon displays. However, we have been actively developing OLED on silicon displays for over five years, and now one of the leading OLED on silicon displays developers. I must mention again, we have a longer-term development project, and that's focused on MicroLED. MicroLED micro displays has potential for super high brightness and low power consumptions, which can make them ideal for many applications, including see-through, augmented reality, and mixed reality applications. In summary, consumer demand is strong on all our core product groups, and we're actively managing our supply chain challenges. We continue our momentum on innovating and advancing our technology for AR, VR, and MR applications. We believe strong interest in the Metaverse is just getting started, and we feel we're very well-positioned to capitalize on the opportunities it provides. We entered 2022 with very strong backlog of orders, and we believe 2022 will be another year of good growth. We are excited for the growth of Kopin as we see a wave of growing interest in AR, VR, and MR products and applications. Our technology advances and current market conditions are very favorable, and we believe Kopin is very well-positioned to capitalize on it. Finally, I would like to make a comment on the equity gain in Q1. As some of you know, Kopin is very strong in IPs. We're over 200 patents and patent applications, providing displays, optics, and module assemblies. One of our IP monetization strategy is to license some of our IPs to startup companies. As a courtesy, as a part of a conversation, we often receive equities in the startups. We have completed a few of those transactions, and our goal is to do more. Some of the early transactions are now going to a more mature stages. We're actually very excited with this IP business model. Now I turn the call to Rich to discuss the financial aspects of the quarter and the full year. Rich, go ahead. Thanks, John. Total revenues for the first quarter ended March 26, 2022 were $11.6 million, compared with $11.7 million for the first quarter ended March 27, 2021, essentially flat year-over-year. Cost of products sold for the first quarter ended March 26, 2022 were $7.8 million, compared with $6.4 million for the first quarter ended March 27, 2021. The increase in cost of sales as a% of product revenues for the first quarter of 2022, as compared to the first quarter of 2021, was due to lower production efficiencies resulting from lower volume of units produced, approximately $450,000 of warranty cost reserves, and approximately $300,000 of additional reserves for excess material. The lower production volumes resulted in less absorption of overhead costs. The additional warranty cost reserves relate to units shipped before the new production processes the company implemented in 2021. The additional reserves for excess material is the result of the company procuring materials for contingency purposes as a result of the supply chain situation. Research and development or R&D expenses for the first quarter of 2022 were $5.4 million compared to $3.6 million for the first quarter of 2021. A 52% increase year-over-year. R&D expenses for the three months ended March 26 increased as compared to three months ended March 27, 2021, primarily due to increased spending on U.S. funded development programs and internal R&D expenses for organic light emitting diode, or OLED development. Selling, general and administrative expenses were $4.4 million for the first quarter of 2022, compared to $5.9 million for the first quarter of 2021. SG&A ended March 27, 2021 at approximately $2.4 million of stock-based compensation costs as compared to $440,000 for the same period in 2022. Excluding the stock-based compensation cost, SG&A expenses were $4 million for the first quarter of 2022, compared to $3.5 million for the first quarter of 2021. The increase are attributed to marketing expenses, which were curtailed during the COVID and additional compensation costs. Other income was approximately $4.7 million for the first quarter of 2022, primarily resulting from the mark to market of an equity investment. As John discussed, part of Kopin's strategy is to monetize our deep intellectual property portfolio, and as part of that, we receive an equity interest in certain licensee companies where we license the IP to them. During the three months ended March twenty-sixth, 2022, we recorded $35,000 of foreign currency gains, as compared to $28,000 of foreign currency gains for the three months ended March twenty-seventh, 2021. Turning to the bottom line, our net loss attributed to Kopin Corporation for the first quarter of 2022 was approximately $1.4 million or $0.02 per share, compared to net loss attributed to Kopin Corporation of $4.1 million or $0.05 per share for the first quarter of 2021. Kopin's cash and equivalents in marketable securities were approximately $26.3 million at March 26th, 2022, as compared to $29.2 million at December 25th, 2021. First quarter amounts to depreciation, stock comp expense are attached in the table to the Q1 press release. The amounts discussed above are based on current estimates, and listeners should review our Form 10-Q for the first quarter of 2022 for any possible changes and additional disclosures. Operator, we'll now take questions. Thank you. Ladies and gentlemen, if you have a question or comment, it is star one on your touchtone telephone. Again, that is star one for any questions or comments at this time. I'll take a question from Glenn Mattson with Ladenburg Thalmann. Your line is open. Please go ahead. Yeah, hi. Thanks for taking the question. So just in terms of the top line, can you just talk about the lower component revenue? You know, it's pretty evenly split, I guess, between military industrial. Was that all related to supply chain issues and there was nothing around demand around that? Then also can you just touch on the status of the customer where mid last year you had to kind of retool the facility and that kind of ramped back up and got back to normal production. Is that still the case with that customer as well? In both cases, yes, it was supply chain issues in both the defense and the industrial. It really was the last couple of weeks of the quarter when it kind of hit us. As John indicated in the prepared remarks, we think we're in good shape going forward. We do expect, you know, intermittent supply chain issues now and again. We're not out of the woods. There's some indications that the situation's getting better, but we wanna be cautious to the investors. At this point, the process changes have been made that we discussed in 2021. The $450,000 of additional warranty costs was kind of the last piece of it. It was kind of a negotiated settlement of units shipped before the process changes. We think, for the most part, it's behind us now, and now it's just fulfilling demand, which as John indicated, we start the year off with a very strong backlog. I guess, would there be any, you know, catch up in revenue over the next couple quarters based on the fact that the demand was there and now the supply chain issues perhaps are in a better situation? Is that something to think about? That's definitely the goal. Yeah. That's why we say. Um- We anticipate growth. Yeah. Right. Question also for John. Can you talk about the new Oculus that's coming out? I believe They're talking about an OLED display there. Can you just give your thoughts on, you know, what you think about the new product and what that means for the stuff that you're doing, whether it be with, you know. It doesn't seem like it's with them perhaps, but maybe with, if the industry is shifting in that direction, if that would be a benefit to you guys. Yeah, of course, this is still kinda not totally official, but we can guess what it is, right? It is OLED. Our guess is OLED on glass. It's not OLED on Silicon. OLED, that's still happy news. The one current one is LCD on glass. You can see the shift from LCD to OLED, which we always anticipate. The next move, of course, we believe it will be all about the silicon. That's one. That is very good news. I think that another very good news is we now believe it is a Pancake optics that we, you know, we have a global trademark on Pancake, and one of the inventor of Pancake is actually in our company. It is not all plastic pancake. That pancake has some glass in it. That conversion, it really indicate where the market is moving, the technology is moving. Optics is going to Pancake. Display is going to OLED, but it's not fully. Display has got OLED on glass, not OLED on silicon, and a Pancake is Pancake, with glass in it, not all plastic. I hope I answered your question. It's a good trend. Right. No, that's very helpful. That's it for me. Thanks. I'll get back in the queue. Once again, it was star one if you had a question. We will go next to Kevin Dede with H.C. Wainwright & Co. Your line is open. Please go ahead. Hi, gents. Thanks for having me. Could you comment on maybe the number of devices that you had to re-engineer the supply chain on and, I guess, the number of components that had to go through additional testing? We probably may not be able to reveal this. We have to be careful, Rich. There's so much involved with defense. You know, honestly, Kevin, we did get a notification from the U.S. government that there's a lot of supply chain issues out there, and they are somewhat concerned about companies divulging information around it. They referenced us to the DFARS, which prohibit really discussions about systems and how they operate. Yeah. I think, Kevin, as you well know, the supply chain issue is not unique to Kopin. It's just that semiconductor chips are missing, and some of the chips are really not that advanced, but they are missing. In many ways, I'm pleased our people actually manage it reasonably well. Okay. Rich, you mentioned you didn't think you were out of the woods yet. What do you think we should look out for? We have commitments from vendors which would indicate that we're in good shape for the rest of the year. We're just putting up the but caveat there that I think given the situation, I think it's unrealistic to think that, you know, we're out of the woods. We do see, you know, we talk to people in the industry, they do see light at the end of the tunnel, and they, you know, but we just wanna make sure that we get a couple more quarters under our belt before anyone starts declaring that we're out of the woods. Okay, fair enough. You've referenced backlog a number of times. I guess you don't wanna quantify it, which is fair, but can you give us a relative move versus the end of the year? Well, you know, we did indicate that we had a $19.8 million quarter, PO in December. In November, we had a $2.3 million, and then there was another $1 million something for another program. Those, you know, were all in November, December, so you can assume that's all shipping this year, and, you know, possibly into the beginning of next year, but the bulk of it will be this year. Okay. John, you touched on, you know, the MicroLED. If I remember correctly, you're developing both in Japan and China. Can you give us a status on that? What's your view to- You have a great question. Yeah. What's happening? What can I tell? What do you want me to tell you? Well, first of all, I'm not sure we Well, yeah. I'm just kinda curious about the development and the time to market, that kind of stuff. Yeah. See, MicroLED, as you well know, some people always consider the ultimate display, which it is true. If it can be developed and produced in a cost-effective way, it probably solve everything that we want to do AR, VR, MR. We work with a Chinese company on a monochrome MicroLED. We work with a Japanese company to do full-color MicroLEDs. Both of them are very super high advanced MicroLEDs, and a lot of them are customer funded. These are customer funded activities. The progress is good. I think China was again because of the lockdown in China probably affects us a few weeks. Otherwise, we might already have something exciting to announce for this quarter. In general, things are going well and some lockdown has slowed down some of the things, but we're still making good progress. How would you recommend we look at time to market? Yes, sir, I couldn't understand what you just said. Well, current market for MicroLED is nobody's gonna get the real market MicroLED this year. Zero. Not all over the world. Right. Okay. We are making good progress. I think we should be one of the leading team coming out, but not this year. For product, for development, for show and tell, for demo, yeah, you'll get it this year. Okay. That means you could have product next year, maybe, right? 2023. God willing. Okay, fair enough. It's a tough technology. Our goal is to demonstrate the potential of this display and show display this year. If we can do that, it could be a major achievement, not just for Kopin, for the industry. Okay. Now I know you referenced the conflict in Europe. I was wondering if you've seen any, I guess, change in thinking because of that from your, you know, your defense-related customers. Well, I mean, nobody wanna celebrate for such a disaster, but we are in defense industries, and we do make systems and or help the components for the systems which are used extensively in the war. Right. I guess what I'm wondering is there greater interest on the part of your customers in some of the products that you're making? Well, just for simple argument, as an example, that was announced, so we can say that, Germany announced that they want to buy more F-35s. Okay. Okay. We are so close to F-35. You can. Right. I think we can connect dots. Right. Thank you. I appreciate you helping me with that, John. Now, am I also correct in assuming that that supply chain is predominantly in the U.S., or are you still sourcing product from Asia that goes into, you know, defense-related components? Yeah. I think, as you well know, a lot of supply chain problem is agonizing because automobile industry is affected by it too. What you're missing is like a microcontroller, which is a very low-tech product. It's made by everybody in the whole world, Taiwan, Korea, China, Japan. But they're short. Once they're short, you can't even make a car too. Everybody's affected by a microcontroller, not advanced IC. It's a really kind of mundane IC. So, for us, just like automobile, you can't find another IC to put in there. You have to get your customers to approve it and then get your compliances. So it slows down things. But it's not fundamental. It's not like a IC you cannot get it anywhere. It's a very common IC. I see. Okay. There's no situation that you cannot get if, for instance, all of a sudden it comes from China. No. Those ICs come from everywhere in the world. It's just that it's short. Everybody double, triple buying it. I see. Okay. I got it. Thank you. Just maybe your take on the progress that RealWear and Solos are making, sort of just to finish up my line of questions. Yeah. I mean, I'm glad you mentioned it. Those are the companies that we license and then in fact take equities in. I don't wanna go lot too far into it. Obviously, some of them are already making progress, and so we have to write up the equity gain, and I think that that will continue. The one that were formed three, four, five years ago, it's just like a VC situation. Some of them become mature stage now, and you're gonna have a series of hopefully monetizing event, like a like VC. We're gonna get things come back and with some significant equity gain. But remember, our goal is more than just the equity gain. We get paid in three ways. We have royalties, and we also sell them components plus equity gain. This way, our business model is very good. I think this is the one area that is not well known by the shareholders. We have several ways to make money for the shareholders. Once we do sell products, we do sell a lot of defense products, but our product is not only just selling displays now. We're getting more and more into assemblies. In the armored vehicles, that is a full system. You can count how many armored vehicles are gonna be, right? Then with IP. Okay. -models. Okay. Well, thank you. Thanks for taking my questions, gentlemen. Appreciate it. Thank you. It's a good question. Thank you. I wish that you were also in Asia. I was traveling. It's not easy traveling Asia. I got locked down, got quarantined for seven days. I just got out. We'll move next to Patrick Metcalf with IVANKERS Direct. Your line is open, Patrick. Please go ahead. Hey, good morning, guys. Good evening, John. Rich, I wanna say. Hi, Patrick. Hey, how are you? Let me get quick. I'm sleepy. Okay. Rich, I wanna give you credit. Go ahead. I wanna give Rich credit for being conservative the past few quarters on the supply chain issues and it sounds like that's now behind us with the but caveat. I wanna thank you as a shareholder. Then secondly, John, I wanna talk to you about a couple of events that happened in the marketplace recently and what you can or cannot speak to. Google made an acquisition for $1 billion for a MicroLED engineering company, and then Snap acquired an optics company for $500 million called WaveOptics. Supposedly, Samsung made an investment into DigiLens, another optics company. with Kopin sitting at $150 million, having a portfolio of microdisplays and supposedly having the exclusivity on all-plastic pancake optics, I just wanted to see if you can talk to that or speak to it. Well, I guess the market temporarily is not very efficient, I guess. Okay. All right. I'll take that as a positive. Okay. I wanted to ask you, as far as plastic Pancake optics is concerned, how do you plan to go to market with that? Because if we go back to the HBT days, if I understand it correctly, you had the greatest technology in the HBT, but the competition came in and stepped on it. Are you gonna go to market in a different approach, a different strategy to try and, you know, get that 100% market share, if you will? If you recall the HBT, I think some of the shareholders may not know. It is a transistor we invented and then for cell phones. It's a power transistor, and then Skyworks and Qualcomm use it for five years was exclusive to it. Of course, we actually didn't patent it, stupid me. Then, somebody in Asia actually can start making it. Then we got JDSU, so we sold the business. In fact, probably we should have kept it because that particular business that we sold to, the company still owned about 50%-60% of market share in the world. It's actually quite profitable. I'm learning my lesson. You know, even the people come in, you're the leader, you don't get displaced that quickly. Okay. I don't know whether how to feel. Yeah. Lastly, on the research and development side of the equation, the revenue side of the equation, how many VR customers do you have? Can you answer to that or is that secret? I mean, in terms of how many units, how many component revenue. Just listen, the F-35 is the most advanced VR AR system helmet in the entire world. They don't build too many of them. They pay well. They do pay well, and we're making profit on it. It's not really how many units, it's how many of the customers willing to pay you for the value, right? To this point, no question about it, Oculus sell a lot of revenues. They probably paid the component guy. I think the component guy is probably not making money, maybe not losing money. Oculus is. I don't wanna speak for Facebook. I don't think they make money selling every unit they sell. We sell. All right. Thank you, John. We sell to avionics, and we make money. Okay. Thank you, John. Yeah. With no other questions holding, Dr. Fan, I'll turn the conference back to you for any additional or closing comments. Well, thank you very much for joining us this evening or this morning. I would like to remind everybody that we are having an annual meeting on May 26, 2022. I'll be back in Boston. You will be receiving our proxy soon. Do please vote. If you are able to come, do attend our annual meeting. I think this year it's most likely gonna be in person. Thank you very much for joining me this evening. Ladies and gentlemen, that will conclude today's call. We thank you for your participation. You may disconnect at this time.