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SEC Response Letter

 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED

PURSUANT TO 17 C.F.R. § 200.83 BY KOPIN CORPORATION.

THIS LETTER OMITS CONFIDENTIAL INFORMATION, WITH AN * DENOTING

SUCH OMISSION. AN UNREDACTED VERSION HAS BEEN DELIVERED TO THE

SEC’s DIVISION OF CORPORATION FINANCE PURSUANT TO 17 C.F.R. § 200.83.

VIA EDGAR

 September 20, 2013

Mr. Kevin L. Vaughn

 Accounting Branch Chief

Division of Corporation Finance

 Securities & Exchange
Commission

 100 F Street N.E.

 Washington, D.C. 20549

Re:
Kopin Corporation

 Form 10-K for the Fiscal Year Ended December 29, 2012

 Filed March 18, 2013

File No. 001-19882

 Dear
Mr. Vaughn,

 This letter is in response to comments received in the letter dated September 5, 2013 (the “Letter”) from
the Staff (the “Staff”) of the Securities and Exchange Commission (the “SEC” or “Commission”) to Richard A. Sneider, Chief Financial Officer of Kopin Corporation (“Kopin”, “we”, “our” or
the “Company”). We have reviewed the Letter and our response is set forth below.

 For ease of reference the comments contained
in the Letter are printed below in italics and are followed by our response.

 Immaterial Restatement with Reclassification of Discontinued Operations,
page 51

1.
We note your disclosure that in the second quarter of 2012, you identified an error in the calculation of intercompany profit elimination in inventory for prior periods, including the years ended December 31,
2011 and December 25, 2010. We note the effect of the error correction on your loss from operations for the year ended December 31, 2011 was $831, or 108% of your previously reported loss from operations. Please address the following:

•

Tell us how you discovered the error

 Background:

Kopin began producing Heterojunction Bipolar Transistors (HBTs) in 1996 at its Taunton, Massachusetts facility and in 2000 Kopin added a second
HBT production facility in Taunton, Massachusetts. In 2009, Kopin obtained a controlling interest in Kopin Taiwan Corporation (KTC), a Taiwanese company, and commenced production of HBTs for customers in Taiwan. In the fourth quarter of 2010, KTC
began production of HBTs for

 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED

PURSUANT TO 17 C.F.R. § 200.83 BY KOPIN CORPORATION.

THIS LETTER OMITS CONFIDENTIAL INFORMATION, WITH AN * DENOTING

SUCH OMISSION. AN UNREDACTED VERSION HAS BEEN DELIVERED TO THE

SEC’s DIVISION OF CORPORATION FINANCE PURSUANT TO 17 C.F.R. § 200.83.

Kopin’s US customers. Shipments from January of 2011 through June of 2011 were small quantities as KTC’s production facilities were being qualified by Kopin’s US customers. In the
third quarter of 2011, the first significant shipments to US customers commenced.

 Kopin records inventory at the lower of cost (determined
on the first-in, first-out or specific identification method) or market. Kopin incorrectly recorded the inventory purchases from KTC at KTC’s selling price to Kopin and not at KTC’s cost. In other words, the Company failed to eliminate the
intercompany profit.

 Response:

Each quarter, Kopin’s inventory value is computed by its cost accountant and the computation is reviewed by the Company’s controller.
Management also reviews a gross margin analysis each quarter. By performing this review, management noted an increase in gross margin in the third and fourth quarter of 2011 and in the first quarter of 2012. The gross margin analysis attributed the
increase in gross margin to KTC’s lower cost structure compared to Kopin’s two US manufacturing facilities. KTC’s cost structure is lower than Kopin’s due to lower wages and overhead, specifically engineering support which is
provided by Kopin. Kopin’s management continued to refine its understanding of what were the specific cost components driving the improved gross margin from KTC as compared to Kopin’s historical gross margins. With this continued
assessment, in the second quarter of 2012, Kopin identified the intercompany profit elimination issue.

•

Describe to us in greater detail the nature of the error in the calculation of intercompany profit elimination

Response:

 Under the terms
of Kopin’s intercompany pricing arrangement, Kopin purchased KTC’s HBTs at a percentage of the price it receives from its US customers. For example, customer A pays [$*] for a finished goods wafer. It costs KTC approximately [$*] to make
the finished goods wafer and it costs Kopin approximately [$*] to test and qualify the finished goods wafers before shipment to customer A. Accordingly, the cost of a wafer produced at KTC should be [$*] ([$*] plus [$*]) in the consolidated
financial statements, however Kopin valued each wafer at [$*] (representing KTC’s selling price to Kopin) in its inventory compilation.

The intercompany profit elimination error is shown in the table below. Please note that Kopin performed this analysis for the three month
periods ended March 26, 2011 and June 25, 2011 and determined that the inventory error was de minimis (approximately $16,000) and, therefore, did not include these periods in the analysis or correction.

 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED

PURSUANT TO 17 C.F.R. § 200.83 BY KOPIN CORPORATION.

THIS LETTER OMITS CONFIDENTIAL INFORMATION, WITH AN * DENOTING

SUCH OMISSION. AN UNREDACTED VERSION HAS BEEN DELIVERED TO THE

SEC’s DIVISION OF CORPORATION FINANCE PURSUANT TO 17 C.F.R. § 200.83.

For the
3 month and year
ended
12/25/2010

 For the
3 month
period

ended
9/24/2011

 For the
3 month
period

ended
12/31/2011

For the year
ended
12/31/2011

 For the

3 month

 period

ended
3/31/2012

 Impact on net income attributable to the controlling interest:

 Beginning inventory error

$
0

$
116,252

$
823,140

$
116,252

$
947,005

 Ending inventory error

(116,252
)

(823,140
)

(947,005
)

(947,005
)

(1,509,460
)

 Net impact

($
116,252
)

($
706,888
)

($
123,865
)

($
830,753
)

($
562,455
)

•

Please provide us with your analysis of the materiality of the error. Discuss why you concluded that amendment to the December 31, 2011 Form 10-K was not necessary.

Response:

 In evaluating
the impact of the intercompany profit elimination error Kopin performed both a qualitative and quantitative analysis under the “roll-over” and “iron curtain” approaches.

Rollover Approach:

 Qualitative
Analysis

 Management assessed the intercompany profit elimination error from a qualitative perspective using the guidance within Staff
Accounting Bulletin (SAB) 99. Within SAB 99 Topic 1, M-1, the SEC provides a list of the type of items that should be considered in making a qualitative determination of the materiality of an issue, including the following:

•

Whether the misstatement arises from an item capable of precise measurement or whether it arises from an estimate and, if so, the degree of imprecision inherent in the estimate

The error occurred because of a failure to properly apply an accounting policy. Kopin purchased the finished goods wafer inventory from KTC.
The inventory was not recorded by Kopin at KTC’s manufactured cost but instead recorded at KTC’s selling cost to Kopin which included KTC’s profit. Accordingly, the intercompany profit was not eliminated. Therefore, it was not an
error in estimation, but rather a calculation that could be precisely measured.

•

Whether the misstatement masks a change in earnings or other trends.

 The error did not
mask a change in earnings or other trends. All trends within the Company’s consolidated financial statements would have remained the same with or without the adjustment. See the table below reflecting the changes and the impacts to the trends.

 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED

PURSUANT TO 17 C.F.R. § 200.83 BY KOPIN CORPORATION.

THIS LETTER OMITS CONFIDENTIAL INFORMATION, WITH AN * DENOTING

SUCH OMISSION. AN UNREDACTED VERSION HAS BEEN DELIVERED TO THE

SEC’s DIVISION OF CORPORATION FINANCE PURSUANT TO 17 C.F.R. § 200.83.

•

Whether the misstatement hides a failure to meet analysts’ consensus expectations for the enterprise.

The analysts’ consensus of Kopin’s diluted earnings per share (“EPS”) for the three month period ended Q4 2011 and for the
year ended December 31, 2011 was $0.03 per share and $0.11 per share, respectively. Kopin’s actual EPS results were $0.00 and $0.06, respectively. Accordingly, Kopin missed analysts’ expectations without the impact of the error.
Please note that Kopin does not provide earnings estimates as part of its financial guidance. For the three month period ended Q1 2012, the analysts’ expectations were for a loss of $0.01 per share and Kopin actual results were a loss per share
of $0.03. Kopin missed analysts’ expectations without the impact of the error.

•

Whether the misstatement affects the registrant’s compliance with regulatory requirements.

The error did not impact any regulatory requirement.

•

Whether the misstatement changes a loss into income or vice versa.

 As the table below
indicates there were no changes in trends or income becoming loss or vice versa.

For the
3 month period
ended and year
ended
12/25/2010

For the
3 month period
ended
9/24/2011

For the
3 month period
ended
12/31/2011

For the year
ended
12/31/2011

For the
3 month period
ended
3/31/2012

 Net income (loss) attributable to the controlling interest

$
4,675,671

$
797,055

($
67,000
)

$
3,597,927

($
2,209,213
)

 Net impact of the error on net income attributable to controlling interest:

(104,830
)

(637,436
)

(111,695
)

(518,562
)

(370,251
)

 Net income (loss) attributable to the controlling interest adjusted for the error

$
4,570,841

$
159,619

($
178,354
)

$
3,079,365

($
2,579,464
)

•

Whether the misstatement concerns a segment or other portion of the registrant’s business that has been identified as playing a significant role in the registrant’s operations or profitability.

 The error did not concern a specific segment as the Company’s segments were based on geography. The Company had two
product lines, Display and III-V. The III-V product line was primarily composed of sales of HBT products. The III-V product line information was split between the Kopin and KTC segment information. The Company provided revenue by product line but
not profitability by product line. The inventory error did not affect revenue.

 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED

PURSUANT TO 17 C.F.R. § 200.83 BY KOPIN CORPORATION.

THIS LETTER OMITS CONFIDENTIAL INFORMATION, WITH AN * DENOTING

SUCH OMISSION. AN UNREDACTED VERSION HAS BEEN DELIVERED TO THE

SEC’s DIVISION OF CORPORATION FINANCE PURSUANT TO 17 C.F.R. § 200.83.

•

Whether the misstatement affects the registrant’s compliance with loan covenants or other contractual requirements.

The Company does not have any debt agreements or other contractual requirements related to its financial position, results of operations or
cash flows. The error did not have any effect on this qualitative consideration.

•

Whether the misstatement has the effect of increasing management’s compensation - for example, by satisfying requirements for the award of bonuses or other forms of incentive compensation.

The intercompany profit elimination error resulted in an aggregate additional $141,000 of bonuses being paid to management including the
controller and the cost accountant. None of the management team, excluding the controller and cost accountant, was involved in the creation of the error nor would they have been in a position to influence the creation of the error. The CFO, as part
of his review process, discussed with the controller how the inventory was priced during his quarterly and annual reviews and was told it was done in conjunction with the Company’s policy. The cost accountant/controller failed to identify that
two different methods were being used, one for inventory produced at Kopin and another for inventory acquired from KTC.

 The controller
and the cost accountant received additional bonuses of [$*] and [$*], respectively as a result of the error. The controller and cost accountant’s wages are [$*] and [$*], respectively for 2012. Management does not believe the bonuses were large
enough to incentivize them to intentionally create the error.

•

Whether the misstatement involves concealment of an unlawful transaction.

 There are no
indications of any illegal or unlawful events.

 Quantitative Analysis:

In evaluating the quantitative impact of the intercompany profit elimination error, management computed the net impact based on the results of
operations for each period including the impact on December 31, 2011. To determine the impact on Kopin’s results of operations, management needed to include the impact on the noncontrolling interest (Kopin owned approximately 90% of KTC,
accordingly approximately 10% of KTC’s excess profits would be attributed to noncontrolling interest) and the tax consequences. The table below reflects the impact for each applicable period.

 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED

PURSUANT TO 17 C.F.R. § 200.83 BY KOPIN CORPORATION.

THIS LETTER OMITS CONFIDENTIAL INFORMATION, WITH AN * DENOTING

SUCH OMISSION. AN UNREDACTED VERSION HAS BEEN DELIVERED TO THE

SEC’s DIVISION OF CORPORATION FINANCE PURSUANT TO 17 C.F.R. § 200.83.

For the
3 month period
ended and year
ended
12/25/2010

 For the
3 month
period

ended
9/24/2011

For the 3 month
period ended
12/31/2011 (A)

For the year
ended
12/31/2011
(A)

For the 3 month
period ended
3/31/2012

 Impact on net income attributable to the controlling interest:

 Beginning inventory error

$
0

$
116,252

$
823,140

$
116,252

$
947,005

 Ending inventory error

(116,252
)

(823,140
)

(947,005
)

(947,005
)

(1,509,460
)

 Net

(116,252
)

(706,888
)

(123,865
)

(830,753
)

(562,455
)

 Tax benefit (B)

—

—

—

255,691

151,863

 Noncontrolling interest

11,422

69,452

12,170

56,500

40,341

 Net impact on net income attributable to the controlling interest:

($
104,830
)

($
637,436
)

($
111,695
)

($
518,562
)

($
370,251
)

 Reported amounts prior to restatement:

 Net income (loss) attributable to the controlling interest

$
4,675,671

$
797,055

($
67,000
)

$
3,597,927

($
2,209,213
)

 Pretax Income(Loss)

$
4,832,874

$
1,197,864

($
3,334,649
)

$
1,015,084

($
1,433,336
)

 Diluted EPS reported prior to restatement

$
0.07

$
0.01

$
0.00

$
0.06

($
0.03
)

 Restatement adjustment

(0.00
)

(0.01
)

(0.00
)

(0.01
)

(0.01
)

 Adjusted Diluted EPS

$
0.07

$
0.00

($
0.00
)

$
0.05

($
0.04
)

(A)
Reported Pretax income includes an impairment of $4,999,512. Excluding the impairment pretax results for Q4 2011 and full year 2011 would have been $1.7 million and $6.0 million, respectively.

(B)
The Company had no tax benefit or provision during fiscal years 2010 and 2011 because the Company’s former subsidiary, KTC, had a full deferred tax valuation allowance.

In performing our assessment of the intercompany profit elimination errors, management prepared and reviewed the proforma effect of the
adjustment along with $147,000 of previously identified uncorrected misstatement. The previously identified uncorrected misstatement of $147,000 was determined to be immaterial and not adjusted within the immaterial restatement. This analysis
identified the following:

 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED

PURSUANT TO 17 C.F.R. § 200.83 BY KOPIN CORPORATION.

THIS LETTER OMITS CONFIDENTIAL INFORMATION, WITH AN * DENOTING

SUCH OMISSION. AN UNREDACTED VERSION HAS BEEN DELIVERED TO THE

SEC’s DIVISION OF CORPORATION FINANCE PURSUANT TO 17 C.F.R. § 200.83.

For the
3 month and
year ended
12/25/2010

For the
3 month
period
ended
9/24/2011

For the
3 month
period
ended
12/31/2011

For the year
ended
12/31/2011

For the
3 month period
ended
3/31/2012

 Net impact on net income attributable to the controlling interest:

($
104,830
)

($
637,436
)

($
111,695
)

($
518,562
)

($
370,251
)

 Other unrecorded adjustments

—

—

—

—

147,000

 Estimated Resta