Good afternoon, and thank you for coming to the 2024 TD Cowen Aerospace and Defense Conference. Presenting next, we have Kopin, a leading provider of specialized application-specific optical solutions for high performance and mission-critical AR and VR applications for the defense market. Presenting on behalf of Kopin, it's my pleasure to introduce Michael Murray, CEO.
Thanks, Chris. Thanks to the folks at TD Cowen for the invitation to talk with you today. I'll start off with a safe harbor statement. I will be making some forward-looking statements in the presentation, so please bear that in mind. We try very hard to be as accurate as we can. However, due to some of the programs that we have, classified programs, as well as some of the things that we're investing in, some of those statements are forward-looking and should be thought as such. So a little bit about Kopin for those of you that don't know our story. 40 years in the business, over 30 years on the NASDAQ, publicly traded, started by our founder, Dr. John Fan, out of MIT Lincoln Labs. We've taken the company through many different cycles.
I joined about a year and a half ago as CEO. We've made a lot of changes, significant changes since then, and we'll talk about those in the deck as we move forward. But we're in a very unique position, number one. Number two, we're actually at a very unique time in AR/VR applications, whether it be in medical or consumer or in defense. AR and VR applications are now abundant, number one. Number two, they're growing. And number three, we're in a great position to capitalize on those opportunities. So when we think about the overall market, we had a recent competitor be acquired by a very large Korean company, so that opened up a lot of space in aerospace and defense specifically, and we're gonna talk about that. Moreover, when you think about our company, we have no debt on the balance sheet.
We have tremendous velocity in our programs and a tremendous order book walking into 2024, so we'll talk about those things. But most importantly, we have a great team. Morale is high. Our customer base is executing well. We've been meeting with General Dynamics, Collins Aerospace, Leonardo DRS, who's presenting in the next bay, about their opportunities, and you can tell based on their presentations that we're in a great space to grow for the next 3-5 years. So a few things. On January sixteenth, we celebrated 30 years on the NASDAQ. We also introduced a new website, a new logo, and brand, after 40 years in the company, something that I was very passionate about over the last year.
How we communicate to our customers in the outside market is truly important, so, something I thought we would talk about today. But more importantly, if you leave with anything out of this conversation, as we sit here today on the thirteenth day of February, we have over $50 million of orders to ship in 2024. Some of that will leak into 2025, just simply because of throughput. But as we sit here today with $50 million in achieved and received orders, I think we're in a great place from a standpoint of order book. Our thermal weapon sight business is leading the way. That's with our partner, Leonardo DRS, who's presenting in the next salon here. But we also have brought in some new technologies and some new contracts.
We just announced a $20.5 million contract for a new thermal weapon sight configuration that is now fully authorized for delivery, so the whole $20.5 million has been authorized by our customer, and we're still going through LRIP on that product as we speak. We also talk about, and I'll get into this in a little bit more detail, since General Dynamics just presented, we have a significant program with the armored tank and armored vehicle platform with General Dynamics Land Systems that we'll give you an update on. As of last week, we've been expedited to pull that to the left, which is great news for us. Furthermore, we recently announced a new Navy research contract. I think you're gonna see more of this from Kopin moving forward.
We're very close to announcing several new contracts with new customers, and some of those new contracts and customers are actually around research. So funded research for our company in the areas of, of AR/VR is going to be very important when it comes to making sure that the innovation engine continues to remain strong within Kopin. So, as I mentioned earlier, I believe that we're going to have several new customers and new projects, and contracts to announce this quarter and next quarter. So a couple highlights from 2023. Part of the overall ethos of the company is to deliver on time and full, and I heard this in the General Dynamics talk earlier. This is very important when it comes to overall profitability for the company.
If you don't deliver on time and full in government contracting, it hurts you on the bottom line, and it hurts your gross margins, and of course, it hurts the customer. So big focus in that area. We also put in place an initiative with the MIT CSAIL program. The reason we did that is we wanted to learn how AI can help us help our customers and ultimately their customers in the end. And that program is going well. It helped us develop what we call the NeuralDisplay Architecture, which we'll talk about in later slides. The other key area that we've been focused on is corporate governance. Our board is going to be changing over the course of this year. We did elect a new board member in David Nieuwsma.
David joins us from Collins Aerospace, one of our largest customers, and he acted as the president of that business for several years. So I'm gonna talk a little bit about this. This is our proprietary microdisplay portfolio, and this is very unique for many reasons, actually. We're the only U.S.-owned company that builds four different types of microdisplays. Moreover, in the world, there is only about three companies that build this many different types of microdisplays. So we're in a very unique position, which is all great. However, we want to scale on that position. We want to be vertically integrated on that position, including optics, drive electronics, housings, et cetera. But we still fundamentally build the best microdisplays in the market, and we're currently leading in MicroLED technology.
We announced our monochrome MicroLED technology last half of 2023, which is shipping around 1.8 million nits. To give you a sense, an OLED device is about 16,000 nits, or your iPhones, as an example, are in that same sort of range. So if you think about 16,000 nits of brightness versus 1.8 million nits of brightness, as an example, just using raw numbers, that's very, very bright, and it opens up a tremendous amount of opportunities, not just in military and defense, but definitely in consumer. So I talked a little bit about this application-specific optical solution, and essentially what this does is it marries the right display with the right optic and the solution for the customer.
In this case, to the far right, the headset on the top, this is our CR3 module, which we released to production. It's for assisted surgery. It sells for around $3,500. Great margin in that business. It's now available for sale. The go-to-market strategy, and this is really important to understand, this is a white label strategy for the company. Our customers will put their label on this and then ship it to their customers. The second weapon sight, or, pardon me, the middle product is our thermal weapon sight product that we do ship into Leonardo DRS. We've had several iterations of this product. This is our largest program. It's called the Family of Weapon Sights, Individual, when we talk about FWS-I or IWS-I, that's the international version.
So, that's what we've received the vast majority of orders on currently. Excuse me. The lower right weapon sight, that actually is shipping into our armored vehicle program, into General Dynamics. There are several of these weapon sights per platform, and the math behind it is really interesting. There's about 4 weapon sights per platform. They sell for around $13,000-$15,000 each. We want to upgrade around 1,000-2,000 armored vehicles over the course of the next 10 years, equating over to $100 million worth of revenue for the company. So very exciting opportunities just in these three programs. And by the way, these are all on order today. So the market opportunity, everyone's going to ask about Apple. I'll address this. When Apple releases another version of Apple Vision Pro, it floats all boats.
Anything that Apple puts out, it basically adds $1 billion to the SAM and TAM for microdisplays. That's why it's really important to understand the volume market and our position in it. So as aerospace and defense incorporates more systems and more vision acuity into their portfolio, our business will rise, as well as the only U.S.-owned defense company that can ship AR/VR glass into U.S. DoD. So again, this significantly raises demand, and Kopin's in a great place to support that demand. So when I talk about application-specific optical solutions, it's really a digital overlay on the optical world. But where we're taking the technology now is to learn about how people actually use the technology.
One of the interesting things that, you know, as I go around and talk to consumer companies, as an example, or even the Integrated Visual Augmentation System team, the IVAS program, they all tell me the same thing: every single person has different eyesight, but we're forcing them to use the same display. If you need glasses, you have a prescription. That prescription is unique to you. So therefore, why would you force someone to use the same display? Doesn't make any sense, right? So in these meetings, whether it be in Cupertino or Menlo Park or with Microsoft, it didn't really matter. Each of those applications, they started talking about how people use information, how people interpret information from their eyes to their brain. And that's where we came up with the technology called the NeuralDisplay .
This technology actually looks back at your eyes. It does that through a light sensor. It uses software to develop what we call our NeuralDisplay Architecture, and it looks for dual eye diversity, any sort of fight or flight technology that we can implement at that point in time to help the user adapt to the technology. Not force the user to adapt to the technology, but force the technology to adapt to the user. And that's critical for us moving forward in terms of adoption rates. So when we think about pupil sizing and software and AI, that's where we're focused. We're not gonna try and solve all the world's problems, but eye tracking and pupil sizing is something that we want to definitely take over in terms of the market.
So, we've been focusing on that the last 18 months or so. The other thing that's important to know about Kopin is we have a tremendous amount of human-centric design capability, whether it be the optics or the ergonomics or the housing that they sit in. This is tremendous technology that we're very unique in, that we have all this technology here in the United States, and we can do everything internally. In fact, we built and designed this entire headset internally within Kopin, and it's now shipping in production, as I mentioned earlier. Lightweight performance, great technology in terms of the display, but the right optic for the right solution for the end user is what we focus on in that human-centric design, which is critical for adoption rate as well as usability.
So we talked a little bit about this, but one of the things that we've learned is daytime applications are critically important. When you think about see-through technologies, I don't view that as viewing a video of what is happening in the analog world. Meaning, I wanna see with my own eyes what's going on in the analog world. That helps me and every user understand what their balance is, understand what's going on spatially in the environment, but you need a very bright display to be able to do that. And we just recently announced a Navy contract to do a transparent, translucent display. That was all the big rage at CES this year. LG, Samsung, they all announced a translucent and transmissive display with AI built in. This follows along the same sort of vein with that.
True see-through AR applications for OLED and MicroLED are critical for our warfighters. As an example, you can see on the screen the green-on-green type of performance that we're seeing in daytime applications. You can only see that right now using ENVG goggles at night. Well, you fight in the day a lot of times, and you wanna know where your buddies are, but you need something bright enough and see-through so that you can do that. We currently have the world's best, in my view, and brightest MicroLED see-through AR application. Sensors, this is an area that we're bringing into the portfolio. It's an area that we're looking for some M&A in terms of technology tuck-ins so that we can add sensors to our portfolio.
Moreover, we are adding sensors, like light sensors, to our displays so that they can adapt to the user and make sure that the user doesn't have to adapt to the technology. So I think this is an area where we're going to have more investment over the course of this year and certainly next. I talked about image processing. This is an area that's really interesting for us. We're only gonna solve certain problems. We're not gonna try and solve everything that's there because there's so much that you can solve with AI. But we're very focused on a couple of areas with MIT and also some of the research grants that we've applied for, some of which we've actually received already.
I think there's going to be several new research grants that we'll achieve over the course of 2024 and 2025 to advance this technology. Now, whether it's a warfighter, whether it's a surgeon or a gamer using their spatial computing devices, these are all the same problems. It doesn't matter which application. We're still trying to solve the human-centric problem of using this technology for more than 20 minutes at a time, and that's a pretty big challenge that Kopin's taking on, along with our partners, and we have signed some significant partners in Korea to help us out. So I wanted to talk about our momentum in defense. Certainly, we've talked a lot about our order book.
These programs on the left, Family of Weapon Sights, which we talked about earlier, our F-35 Joint Strike Fighter helmet program, we see these continuing on for 3-5 years. We're just hitting full stride in production on those two programs. They add tremendous value to the company. They drive about 60%-70% of our overall revenue. We're also starting to see the international market start to increase based on what we see geopolitically in Israel, certainly what we see in Ukraine, and we are expecting other orders from other countries in that area as well. So international long range, we do expect some orders this year, and then certainly the international sniper versions, we expect to see that growth continue on for the next couple of years along with the international weapons sight individuals.
The other area that we'll talk about is the M1A2 upgrade. That's what I mentioned earlier. Even though the SEPv4 upgrade was canceled by the U.S. government to General Dynamics, GDLS is asking us to deliver more quickly on our PPAP program, which is great news for us. Because we're part of their AI targeting system, and we reduce size, weight, and power and increase lethality, we're in a good place to continue to deliver on that program. I did talk about the $20.5 million order that we just received. This is a new weapon sight, a new thermal weapon sight for us. The configuration is very different optically than what we currently produce, but this is a new family of weapon sights that we'll be delivering to our customers.
So we have the current Family of Weapon Sights, international, long range, now this new configuration. So, that's entering into production this year and will ship into next year. So tremendous growth in thermal weapon sights and, certainly within the armored vehicle programs, as well as the fast mover programs for F-35. We are expecting our OLED orders for production OLED for F-35 in the coming quarter. We also have been working with our customer base and on new programs. We've talked a lot about IVAS and IVAS Next. That's an area that we're very focused. We definitely want to be part of the Soldier Vision programs, in that office, as well as other offshoot technologies, of which we did, present at the Collins, or pardon me, the Wilcox booth at the SHOT Show, our off-the-visor HUD, which received a tremendous amount of interest.
We'll be talking about how we're going to commercialize that in the next little while. But we see tremendous opportunity and volume in the off-the-visor HUD-type technologies. We're talking around 100,000-200,000 units. So, very exciting technology for us. And we partnered with Wilcox, which is a tremendous company. And if anyone knows Wilcox, you know that they have a great brand, a great recognition within SOCOM and certainly the Army. We talked a little bit about advanced research. This is an area that we're very active in right now.
Because of the amount of money that's being allocated to AI, as well as soldier vision systems, I think this is a good place for Kopin to spend our time, and that way, we're funding our own research and development with government money, as opposed to only internal research and development. ... Okay, let's talk about MicroLED. This is a technology that we're at the forefront. We're the vanguard of MicroLED technology here in the United States. This is an area where if you Google hard enough, you'll find that some of the largest spatial computing companies in the world have been spending millions of dollars in this technology. We currently have a monochrome version of our MicroLED that's going to be shipping in production this year.
We do have a color program as well, and we've been working very actively with our consumer companies through one of our partners, so that we can deliver this technology through our partners, as opposed to going direct. So this would be a licensing model of our technology to our Korean partner, to the consumer base that they have, which are the top two spatial computing companies in the world. So we're very excited to keep working on this and continue to drive this brightness, you know, 40-50-60 times higher than any OLED that's out there. And microLED technology, because of how it works and how bright and the contrast that you can receive from it, we think this is the future of microdisplay technology.
So when we think about different technologies, and this is very unique for Kopin in that we can actually build those four different types of microdisplays. A lot of our competitors, actually, every competitor, only builds one type of microdisplay. Specifically here in the United States, we're the only company that can build all four. So in this application, for medical as an example, they like OLEDs. It's a nice technology for them. The brightness is good, the color contrast is good, the-- it's inexpensive for the most part. But for things like fixed-wing aircraft, fast movers, they want something super bright so they can layer in things like waveguides, as an example, so that they can do different types of optical assemblies with them. They really want a higher brightness, so that's where the MicroLED technology comes into play. But as you can imagine, if you're flying a fast wing or a fixed-wing aircraft, you can't tell your adversary to, you know, wait a second, so you turn the brightness down, the contrast down of your microdisplay. So you want to do that dynamically. You have about 500 milliseconds to do that. That's why we're developing what's called the NeuralDisplay
If you ever watch a TV show that has a logo, like NFL, if you're watching, that exciting finals game, you could see the NFL logo on the bottom right-hand corner. If you turn off your TV, if it's OLED, it will still be there after it's powered off, and that's what we call ghosting, as an example. If you have that in a thermal weapon sight, it's not advantageous, trust me. So, we think that transition will happen over the course of the next couple of years, but we're being very cautious as we do. Now, armored vehicles, very interesting. They actually chose an LCOS display. The reason they chose LCOS is it has a very high refresh rate.
If you're driving a vehicle at 60 miles an hour, trying to shoot another vehicle driving 60 miles an hour, you want a very high refresh rate. Excuse me. So this is something that I'm very much a proponent of, our strategic initiatives for the company. We have a path to profitability initiative this year. Our goal is to exit 2024 profitable in operating income, which is very important to the business. Operational excellence, I talked about earlier in terms of delivering on time in full. That's what our customers expect, and that's what we expect from our vendors. Our Fab-lite , Fabless model, this follows along with working with partners that are really key in the industry, as well as driving technology and putting our money to work where it makes sense.
Then the defense HMD strategy we talked about, and then talent, we've been doing a great job of not only acquiring talent, but retaining the talent that we need to grow. Kopin has over 200 pending or issued patents, 20 patents around OLED technology, which is, tremendous, and backplane technology. But we also now have, six patents that are pending for IP around intelligent display control. When I meet with consumer companies or defense companies alone, I ask them whether or not a 4K display would make a difference, or an 8K display would make a difference in AR/VR-type applications. The answer is no. It would be nice to have. It's a marketing checkbox. However, controlling the display, adapting the display for the user is where, we hear and see customers going, and that's why we've been investing in artificially intelligent display systems.
So from an income statement perspective, I think we did a good job last year of controlling costs. We have taken a tremendous amount of cost out of the balance sheet. We did have two reductions in force last year. We also spun out our OLED group, most of it, not all of it. But when you look at the loss from operations, we've been doing pretty well at bringing that number in line to be profitable this year. I think that's where when you think about the loss that we had in 2023, ending in September, you can see a fine line trajectory going in the right direction towards profitability and at least be break even. And then from a cash perspective, at the end of September, we had $21.7 million in cash.
That cash number obviously is coming down a bit over the course of Q4, as we have had to staff up, number one. Number two, we have bought some inventory of long lead items for these new orders. In Q4, we also started hiring our second shift. That second shift will come online at the end of this month so that we can start producing at much higher rates than we did before. So that's why you're seeing some of the accounts receivable go up, as well as the inventory go up, and that's really to fund our revenue for the year. This is the team. We have a great team. We've been adding to it. We've got a lot of experience. For those of you that don't know Rich, he's been with the company for several years.
Paul has been with us since 2014, and Bill has been in the business of microdisplays for a number of years with Kaiser Aerospace and Collins. So we have a great team. We're growing, we're adding people, we're hiring, and we've got a tremendous order book as we sit here today, and it's only February, and we expect to add several new orders and new customers to that order book this quarter, next quarter, and of course, throughout 2024. So very unique market position. The market opportunity is growing. Apple floats all boats. We're an industry leader here in the United States. Our largest competitor was just acquired. That opens up a lot of space. Aerospace and defense, the U.S. DoD currently buys more microdisplays than most AR/VR companies combined. So it's an interesting space for us to be in.
We have the top customers, the top programs being JSF, F-35, the Abrams Tank, Family of Weapon Sights, and our next-generation thermal weapon sights. So we're in a good position from that standpoint, and then obviously, a rich IP portfolio to pull from. I think that is it for me. I'll take some questions.
Thanks, Michael. First one, just could you touch on a little bit more, like, what do you think the key drivers of the recent strong momentum and new orders from the defense market are?
So I think there's a solid refresh going on in terms of weaponry as well as ammunition with the U.S. DOD. Certainly what I see in the international community with things in Israel, certainly with what's going on in Ukraine, is driving a lot of that spend. But AR/VR glasses and AR/VR technology is at its infancy, actually, in the U.S. DOD. So a lot of these programs are just getting into production, so we haven't hit full rate production on any of these components yet. So our better days are ahead of us, not behind us, for all the programs that we just mentioned. But more importantly, we're sole source in the programs that I just spoke about.
So as they catch wind and as they get into production, we'll be right behind, those big, tier ones that you're meeting with here today. As they grow their revenues, we'll grow along with them.
You mentioned AI playing a huge role in Kopin's future. Just curious, in terms of internal development versus partnering with other companies, how do you think about that going forward and developing that technology?
Great question. So we have a tremendous electrical, mechanical, optical engineering capability within the company today. When I started, we couldn't spell AI, right? So, we've been adding to that, and certainly working with MIT, it gives us a look at some of the best PhD students that we could hire. And of course, we're local to Boston, so we can do that pretty quickly. We are hiring in that area of software and AI. Where I want to get to is a fully integrated, vertically integrated company that can support software and AI and optical, mechanical, and electrical. Because I think the marriage between AI and the way people view things or hear things is already happening.
We see it at Apple, we see it at Meta, we see it all the big consumer companies, and I think we need to be part of that because, again, we can build a great display, and we do. However, controlling that great display for the user is what's next, and we're already advanced from our competitors for that, and we're hearing that from some of the largest companies in the world.
How are you thinking about the path to profitability this year, and what needs to happen to get there?
Yeah, so we spend a lot of time on cost controls, and we continue to do so. We spend also a lot of time with our vendors, which is something that I don't think Kopin has done a good job at in the past, of making sure that our vendors understand the opportunity that they have with Kopin. Negotiations, returns, we actually returned more product to our vendors in Q3 and Q4 than Kopin has returned to their vendors in the last five years. So great data point that we're going in the right direction. Incoming controls for quality is definitely improving for the company. That hits the bottom line immediately. But having a great top line always helps, and that's where the revenue from these new orders come into play.
We're also negotiating our contracts much more aggressively and with a little bit more savvy, because I don't think Kopin had that ability to really understand some of the TINA regulations, some of the other contract negotiation tactics that we needed to put in place. And moreover, we raised prices. To be quite frank, we did have to raise prices on several of our programs for the simple fact that inflation went up, and we weren't doing that previously. So I think the combination between raising prices, cost controls, and better negotiations, higher quality, and then making sure that we absolutely have a fine line on what we spend our cash on. And I think Rich has done a really good job of controlling our cash and certainly our costs.
I think if we do those things well this year, I think we'll be, we'll be profitable by the end of 2024. That's the goal. Thanks very much. Appreciate it.