KOSS — what changed in the latest 10-K

Text added vs the prior filing · source: 10-K · 2026-08-28

• During the fiscal year ended June 30, 2026, management announced its intention to pursue acquisition targets as part of its “diversification by acquisition” strategy. The success of the Company’s intellectual property enforcement campaign, coupled with prudential cash management, has created an attr…

• The Company expects this expanded strategy to substantially change its financial profile over the next one to five years and generate predictable, recurring revenue streams. However, during the acquisition phase, selling, general and administrative costs are expected to increase in the near term. Th…

• John C. Koss is recognized for creating the personal listening industry with the first Koss SP/3 stereo headphone in 1958. The Company regularly applies for registration of its trademarks in many countries around the world, and over the years the Company has had numerous trademarks registered and pa…

• and importance to the conduct of its business. The Company considers protection of its proprietary developments important; however, the Company’s business is not, in the opinion of management, materially dependent upon any single trademark or patent.

• The Company markets and sells its products in North America, Europe, Asia-Pacific, Latin America and other international markets. International operations are subject to various risks, including changes in economic conditions, political and social instability, fluctuations in foreign currency exchan…

Text removed vs the prior filing · source: 10-K · 2025-08-29

• John C. Koss is recognized for creating the personal listening industry with the first Koss SP/3 stereo headphone in 1958. The Company regularly applies for registration of its trademarks in many countries around the world, and over the years the Company has had numerous trademarks registered and pa…

• The Company’s competitive position and risks relating to its business in foreign markets are comparable to those in the domestic market. In addition, the governments of the United States and foreign nations may elect to erect trade barriers and impose further tariffs on exports and/or imports, respe…

• The Company has sales personnel currently located in the Netherlands and the Caucasus region to service the international export marketplace. The loss of these personnel would result in a transfer of sales and marketing responsibility. The Company sells its products to independent distributors in co…

• As a result of the Russian-Ukraine conflict, the Company suspended all sales to Russia in accordance with Executive Order 14071 issued by President Biden on April 6, 2022. Sales to Ukraine have also been impacted as a result of the humanitarian crisis there due to the ongoing hostilities. In the yea…

• The Company has a manufacturing facility in Milwaukee, Wisconsin and uses contract manufacturing facilities in the People’s Republic of China and Taiwan. A contract employee is based in China to manage supplier quality and to assist with development of new products. Since these independent suppliers…

Text added vs the prior filing · source: 10-K · 2026-08-28

• The Company’s operations and financial results are subject to risks arising from evolving U.S.-China trade relations. Since a substantial portion of the Company’s products are manufactured by third-party contract manufacturers located in China, U.S. tariff policy on China-produced goods has remained…

• Continued volatility in trade relations between the U.S. and China, including the potential for higher tariffs or new trade restrictions, could adversely impact the Company’s sourcing, pricing, and profitability. The Company is actively monitoring these developments and assessing mitigation strategi…

• The Company receives a material portion of its sales and profits from business in Europe. To the extent that the value of the U.S. dollar increases relative to currencies in those jurisdictions, it increases the cost of the Company’s products in those jurisdictions, which could create negative press…

• customers in U.S. dollars. Volatility in the exchange rates between the foreign currencies and the U.S. dollar could result in increased prices, a decrease in the overall demand for the Company’s products or lead customers to purchase lower-priced, lower profit products and, as such, could have an a…

• The current hostilities in Eastern Europe and the resulting economic sanctions imposed by the government have impacted the global economy. The continuation of the military conflict in Eastern Europe, as well as the tension in the Middle East, could lead to increased supply chain disruptions, inflati…

Text removed vs the prior filing · source: 10-K · 2025-08-29

• The Company's operations and results are influenced by both global and regional economic environments, and less than favorable economic conditions may have a material adverse impact on the Company's business, operating results, and financial position.

• The Company sales outside the U.S. represent nearly 30% of total net sales for the fiscal year ended Jne 30, 2025. Moreover, the Company relies almost exclusively on contract manufacturing facilities based in the People’s Republic of China to produce its goods, underscoring the critical importance o…

• The Company’s operations may be affected by political developments, international trade disputes and restrictions, natural disasters, public health concerns, and other disruptions to business activities.

• Political developments, international trade or other disputes, natural disasters, public health concerns, and various business disruptions may have a significant adverse impact on the Company, as well as its customers, employees, contract manufacturers, logistics providers, and distributors.

• Uncertainty associated with the current U.S. presidential administration and changes in government policies that have and will continue to occur may operations, cost structure, and competitive environment. For example, the recent changes to corporate tax laws and rates, environmental regulations, in…

Text added vs the prior filing · source: 10-K · 2026-08-28

• The information set forth in Note 20 “Legal Matters” to our Consolidated Financial Statements under Part II, Item 8, “Financial Statements and Supplementary Data,” is incorporated herein by reference.

Text removed vs the prior filing · source: 10-K · 2025-08-29

• As part of its intellectual property enforcement program, on July 22, 2020, the Company brought patent infringement suits against certain parties, including PEAG, LLC d/b/a jLab Audio and Skullcandy, Inc., alleging infringement of the Company’s patents relating to its wireless headphone technology a…

• In early fiscal 2020, the Company was notified by One-E-Way, Inc. that some of the Company’s wireless products may infringe on certain One-E-Way patents. A Supplemental Notice of Infringement was sent to the Company on March 18, 2025. The Company is investigating the merits of the notice.

Text added vs the prior filing · source: 10-K · 2026-08-28

• During the fiscal year ended June 30, 2026, management announced its intention to pursue acquisition targets as part of its “diversification by acquisition” strategy. The success of the Company’s intellectual property enforcement campaign, coupled with prudential cash management, has created an attr…

• The Company expects this expanded strategy to substantially change its financial profile over the next one to five years and generate predictable, recurring revenue streams in the $2 million to $4 million EBITDA range. However, during the acquisition phase, selling, general and administrative costs …

• Net sales for fiscal year 2026 increased by $396,603, or 3.1%, to $13,020,773 compared to fiscal year 2025. Sales growth was largely driven by a significant custom order to the Education market, combined with a 20.6% increase in Direct-to-Consumer (DTC) sales compared to the prior year, which were …

• Gross profit as a percentage of sales increased by 4.1 percentage points over the prior fiscal year from 37.8% to 41.9%. Excluding the tariff refunds of $753,000 recorded as an offset to cost of sales, gross margins were 36.1% for fiscal 2026, a 1.7% decline from the previous fiscal year. The adver…

• Selling, general and administrative expenses increased 7.0% over the prior fiscal year due to legal fees and expenses incurred in relation to patent litigation during the year, along with an increase in deferred compensation expense. The legal fees were offset by licensing proceeds from the patents…

Text removed vs the prior filing · source: 10-K · 2025-08-29

• Net sales grew 2.9% to $12,624,170, mainly as a result of a 48% increase in sales to our European distributors, a 16.5% increase in Direct-to-Consumer (DTC) sales. The growth was somewhat offset by lower sales to domestic distributors claiming excess inventory of prior year models of non-Koss elect…

• Gross profit as a percentage of sales increased by 3.7 percentage points over the prior fiscal year from 34.1% to 37.8%. A favorable sales mix, with a higher mix of higher margin sales to certain domestic distributors and DTC coupled with sales to Europe that generated higher than normal margins du…

• Selling, general and administrative expenses increased 7.5% over the prior fiscal year principally due to the increase in new product compliance testing and certification. Legal fees and expenses also increased in support of the Company’s patent defense litigation and the settlement of an ADA lawsu…

• Total tax expense of $17,482 was recorded for the year ended June 30, 2025 driven by minimum required payments and in increase in the uncertain tax position (UTP) related to research and development credits taken in the prior year and the appropriate tax and penalties that would be incurred should …

• Loss before income tax provision (benefit) as % of net sales