美國

證券交易委員會

華盛頓特區20549

表 10-Q

☒    根據1934年證券交易法第13或15(d)節的季度報告

 截至季度結束 2024年9月30日

或者

☐    根據1934年證券交易法第13或15(d)節的轉型報告書

 委員會文件號 0-3295

科斯公司

（依據其憲章指定的註冊名稱）

註冊人電話號碼，包括區號：(414) 964-5000

在法案第12(b)條的規定下注冊的證券：

請用複選標記指示註冊人：（1）是否在過去12個月內（或註冊人被要求提交此類報告的較短期限內）按照1934年證券交易法第13或15（d）條的規定提交了所有要求提交的報告，以及（2）過去90天註冊人是否受到了這樣的提交要求的指導。是☑沒有。☐

請用複選標記指示註冊人是否根據S-t法規第405條（本章節第232.405條）要求，在過去12個月內（或註冊人被要求提交和發帖此類文件的較短期限內）已經以電子方式提交了每一個互動數據文件。是☑沒有。☐

請在方框內打勾，表明註冊者是否爲大型加速縮表公司、加速縮表公司、非加速縮表公司、小型報告公司或新興成長型公司。請參閱交易所法規120億.2號文件中「大型加速縮表公司」、「加速縮表公司」、「小型報告公司」和「新興成長型公司」的定義。

如果是新興成長型企業，請勾選複選標記，表明註冊者已選擇不使用延長過渡期來符合根據證券交易法第13(a)條規定提供的任何新財務會計準則。 ☐

請通過複選標記指示註冊人是否爲殼公司(如《交易法規》第120億.2條所定義)。 是 ☐否☑

2024年10月28日，註冊人的普通股股份流通中 9,350,795交易所的流通股份

科斯公司

10-Q表格

2024年9月30日

指數

 
‎

第一部分

財務信息

項目1。財務報表

科斯公司

簡明合併資產負債表（未經審核）

 附註是這些基本報表的一部分。
‎

KOSS 公司

簡明合併運營報表（未經審計）

隨附的附註是這些簡明合併財務報表不可分割的一部分。
‎

科斯公司

簡化的現金流量表（未經審計）

附註是這些基本報表的一部分。
‎

KOSS CORPORATION

股東權益簡明綜合基本報表（未經查核）

相關附註是這些基本報表的一個不可或缺的部分。

 
‎

KOSS CORPORATION

基本報表附註

2024年9月30日

(未經查核)

1. 所有板塊重要會計政策摘要

該公司的延期賠償責任為現任職員，並根據服務年份和賠償，以及與預期退休日期、折扣率和死亡率表相關的各種假設計算。相關費用是使用預期付款的現值淨值計算，並包括在簡明合併營運報表中的銷售、一般費用和行政費用中。於二零二四年九月三十日及二零二四年六月三十日記錄的延期賠償負債為美元2,290,498 和 $2,093,124，分別。現任職員的延期賠償責任增加，以及截至二零二四年九月三十日止三個月內記錄的賠償開支，主要是由於因為增加一年服務年度，因該安排所得的未來補償金額的年度增加所致。根據此安排記錄的賠償費用為 $197,374 截至二零二四年九月三十日止三個月的薪酬收入比較為 $59,935 三個月 截至二零二三年九月三十日。

3.    存貨

4. 信貸資金

5. 營業收入確認

公司於2024年9月30日及2023年同期間內確認了營業收入，這些收入包括在該期初的透支收入負債中的$77,103 15.1107,205，用於與消費者和客戶保固相關的履行承諾。公司估計透支收入履行承諾在 一年 天從發票日期計算，被視為商業合理。 三年 內完成，因此使用相同的時間框架來確認透支收入。

7. 相關方交易

公司從Koss Holdings, LLC在威斯康辛州密爾沃基的設施租賃，該公司由前主席撤銷信託的五名受益人持有的信託共同擁有的五個平等持有權益控制，包括公司的現任股東。於2022年5月24日，續租了該租賃合同，租期至 五年後，截至2028年6月30日，並被歸為營運租賃。 租約延長將租金保持在每年固定率的$380,000 ，並包括在2028年6月30日到期後以增加率$的續租選擇權397,000 為期 五年後 。談判的租金增加將計劃於2028年首次提高租金自1996年以來。 公司負責所有物業保養、保險、稅金和其他與擁有權利相關的正常費用。

8. 帳款應收集中

截至2024年9月30日，公司的頂級 三 應收賬款客戶佔據了大約百分之 24%, 222024年6月30日和2023年12月31日的時間點，公司從Thrivel Earlier Detection Corporation（“Thrive”），Ashion Analytics，LLC（“Ashion”）和OmicEra的收購中記錄的關於監管和產品開發里程碑的待定支付負債的公允價值總和為2.779億和2.887億美元。公司使用概率加權情境折現現金流模型評估預期的待定支付負債和相應的與監管和產品開發里程碑相關的負債的公允價值，該方法與預期待定支付負債的初始計量一致。每個潛在情境應用成功概率，然後通過現值因子計算折扣，得出相應的現值。時間的流逝以及草擬的里程碑實現時間，現值因子，實現度（如適用）和成功概率的變化可能導致公允價值測量的調整。與監管和產品開發里程碑相關的待定支付負債的公允價值是以2024年6月30日和2023年12月31日的加權平均成功概率和現值因子計算的，成功概率分別為%和%，現值因子分別為%和%。付款範圍的預測財政年度範圍為2025年至2031年。所使用的不可觀察的輸入值按待定支付負債的相對公允價值加權。 15交易應收賬款的 三 截至2024年6月30日的應收賬款客戶佔據了大約百分之 18%, 152024年6月30日和2023年12月31日的時間點，公司從Thrivel Earlier Detection Corporation（“Thrive”），Ashion Analytics，LLC（“Ashion”）和OmicEra的收購中記錄的關於監管和產品開發里程碑的待定支付負債的公允價值總和為2.779億和2.887億美元。公司使用概率加權情境折現現金流模型評估預期的待定支付負債和相應的與監管和產品開發里程碑相關的負債的公允價值，該方法與預期待定支付負債的初始計量一致。每個潛在情境應用成功概率，然後通過現值因子計算折扣，得出相應的現值。時間的流逝以及草擬的里程碑實現時間，現值因子，實現度（如適用）和成功概率的變化可能導致公允價值測量的調整。與監管和產品開發里程碑相關的待定支付負債的公允價值是以2024年6月30日和2023年12月31日的加權平均成功概率和現值因子計算的，成功概率分別為%和%，現值因子分別為%和%。付款範圍的預測財政年度範圍為2025年至2031年。所使用的不可觀察的輸入值按待定支付負債的相對公允價值加權。 12交易應收賬款的百分之

‎

九.法律事宜

本公司亦會在其正常業務中不時發生的各種其他索償和訴訟。儘管管理層目前認為，對本公司的個別或整體解決這些索賠並不會對其簡明合併財務報表產生重大不利影響，但這些事項可能存在不確定性，並且管理層對這些事項的看法在未來可能會改變。

‎

關於前瞻性陳述的警語

本季度的第10-Q表格（"第10-Q表格"）包含根據1995年《私人證券訴訟改革法案》（"法案"）該術語的前瞻性陳述（1933年證券法27A條和1934年證券交易法21E條）。公司可能會不時在向證券交易委員會提交的申報書、新聞稿或其他文件中進行其他書面或口頭前瞻性陳述。本第10-Q表格中包含的非歷史事實的陳述均為根據法案安全港條款而作出的前瞻性陳述。前瞻性陳述可能包括但不限於收入、收益或虧損和資本支出的預測，關於未來運營、預期融資需求、符合貸款協議中金融條款、資產或業務收購或出售計劃、關於公司產品或服務的計劃、重要性評估、未來事件的預測、未決訴訟和可能訴訟的影響以及與前述相關的假設。此外，本第10-Q表格中使用的“預期”、“相信”、“估計”、“期望”、“打算”、“計劃”、“可能”、“將”、“應該”、“可能”、“可以”、“將”、“預測”、“預測”、“潛在”、“繼續”、“尋求”、“目標”、“項目”及其變體和類似表述旨在識別前瞻性陳述。

前瞻性陳述本質上受到風險和不確定性影響，其中一些風險和不確定性根據當前預期無法預測或量化。因此，未來事件和實際結果可能會與本第10-Q表格或其他公司提交的前瞻性陳述，新聞稿或其他文件中包含的前瞻性陳述設定的、思考的或構成基礎的結果有實質不同。除本第10-Q表格中討論的因素外，其他可能有助於或導致此等差異的因素包括但不限於以下一個或多個領域中的發展：未來經濟狀況的持續波動；公司成功開發新產品並評估潛在市場機遇的能力；消費者對新消費電子技術的接受度；公司成功且有利可圖地推廣其產品的能力；新產品推出的速度和消費者接受程度；公司產品競爭情況的數量和性質；定價；客戶的數量和性質以及其產品訂單；公司滿足產品需求的能力；由第三方供應商生產；國外製造、採購和銷售（包括涉及外国政府的法規、貿易和進口問題）；與大流行病和其他健康危機或自然災害相關的不確定性，包括其可能對公司營運和供應鏈的影響；東歐持續衝突和中東地區不穩定對公司運營的影響；影響公司或音視頻行業的任何司法、行政或立法行動的影響；借款成本；稅率的變化；任何訴訟、政府調查、執行行動或其他法律程序的結果；公司保留和聘請關鍵人員的能力以及公司的風險因素在公司截至2024年6月30日止財政年度的風險因素和管理討論和分析和隨後提交的第10-K表格的財務狀況和營運結果部分中進行了描述。

讀者應注意不過度依賴本文件中包含的任何預見性陳述，該等陳述僅反映本日的狀況。公司不承諾公開發表任何對這些預見性陳述的修改結果，該修改可能反映本日之後的事件或情況，或反映新資訊。

 
‎

 項目2. 管理層的財務狀況和營運結果分析

以下討論和分析補充了我們管理層截至2024年6月30日的年度報告中包含的管理層討論和分析，該報告已於2024年8月30日提交給證券交易委員會，在此基礎上假設讀者已經閱讀或可以獲得該討論和分析。以下討論和分析還應與此季度報告的未經審計的合併財務報表和相關附注一起閱讀。該討論包含反映我們業務計劃和策略的前瞻性陳述，涉及風險和不確定性。您應該查看截至2024年6月30日结束的財政年度的年度報告中的“風險因素”部分，該部分已由接下來向證券交易委員會提交的文件進行更新，以討論可能導致實際結果與以下討論和分析中描述的結果有實質差異的重要因素。您應仔細閱讀此季度報告中有關前瞻性陳述的“有關前瞻性陳述的謹慎聲明”。

概覽

公司最初於1958年開發了立體聽覺耳機，自那時以來一直被認為是該行業的領導者。Koss推出了一系列高保真耳機、無線藍牙耳機、無線藍牙揚聲器、電腦耳機、電信耳機和主動降噪耳機。該公司作為一個業務部門運營，其主要業務線是設計、製造和銷售立體聽覺耳機和相關配件。

財務結果

以下表格呈現了截至2024年9月30日和2023年9月30日三個月的選定財務數據：

‎

2025會計年度期間結果與2024會計年度期間相比

(評論指9月30日結束的三個月，除非另有註明)

截至2024年9月30日的三個月淨銷售額為3,201,868美元，較去年同一三個月期間的3,373,938美元下降了172,070美元，或5.1%。前一年第一季度的一筆大型定制訂單未重複出現，導致當期下降。除此之外，對美國經銷商的銷售大約下降了20%。對我們歐洲市場的銷售增加和直接消費者（“DTC”）銷售近18%的增長確實有助於部分抵消下降。

在國內市場，截至2023年9月30日結束的三個月淨銷售額從2023年9月30日結束的2,603,158美元下降了435,794美元，或16.7%，至2024年9月30日結束的2,167,364美元。下降原因包括前一年的一筆非重複性定制訂單、美國經銷商銷售因漏交貨和新訂單時機而減少。與前一年相比，教育和音樂市場的銷售也下降了55%，進一步助長了整體下降。與上一年度相比，2025財年第一季度DTC銷售的增加在一定程度上抵消了部分國內銷售的減少。

對出口市場的銷售是該季度的一大亮點，因為公司兩家最大的歐洲經銷商替一項新發布的產品下了大量訂單，使該產品的銷售額較前一年第一季度增加了86%。 在和佐治亞經銷商的銷售也較前一年增加了100%，一家加拿大零售帳戶在停止經營公司產品線後以一筆可觀的新訂單回歸。儘管這一好評，烏克蘭經銷商尚未重新訂貨，因此與2024財年第一季度收到的約214,000美元訂單相比存在差距。

2024年9月30日結束的三個月內，以淨銷售額的36.6%計算的毛利潤較2023年9月30日結束的三個月內的31.6%增加了500個基點。一個良好的銷售組合，包括較高毛利潤的DTC銷售的較高比例以及新發布的產品銷售給我們的歐洲經銷商，僅稍微被較低毛利潤的美國分銷銷售比例抵消。有助於提高毛利表現的另一個因素是與確保新產品發布適當水平相關的運費開支抵銷。由於某些商品的庫存超過兩年銷售量，使存貨超額和過時存貨備用金額增加，對2024財年第一季度毛利潛在產生了負面影響。

貨運費率在2024年9月30日結束的季度中略有上升。 隨著季節高峰和西岸到midwest之間的延遲，提前時間也有所增加。公司60％的貨物以較低固定價格運輸，可以通過與專門的貨運代理合作來獲得。由於美國進口需求在季節高峰期間增加，通過紅海和蘇伊士運河運輸所面臨的重大挑戰引起全球貿易和成本增加，市場價格預計將在下一季度繼續上漲。 公司還繼續監控東歐和中東地區持續的衝突，並在必要時準備采取反應以應對供應鏈中斷。

截至2024年9月30日結束的三個月，銷售、總體和管理費用增加了273,780美元，占原有1,536,279美元的17.8％，至1,810,059美元。這一增長幾乎完全歸因於推遲的補償責任增加，這是由於計算中使用的折扣率降低，以及由於額外的一年服務而導致預期支付增加。工程費用增加，主要用於新產品測試和證書成本，部分抵銷了法律費用的下降。

2024年9月30日結束的三個月，利息收入為220,358美元，主要是由於將美國國庫投資中賺取的利息，在季度中保持最低風險配置的情況下賺取公司過剩現金的回報。與在前一個財政年度同期的這些證券中賺取的212,859美元利息收入相比。

利用淨虧損抵繳後，2024年9月30日和2023年結束的三個月中都沒有或幾乎沒有應納稅收入，因此對聯邦所得稅支出都未作記錄。2024年9月30日結束的三個月，州所得稅支出為2,760美元，反映在考慮淨虧損後的微不足道的應納稅收入後，計算出的最低應繳稅款。2024財政年度第一季度記錄的州所得稅支出為1,879美元，這僅代表由於沒有應納稅淨收入而只需支付最低應繳納稅款。截至2024年6月30日時存在的聯邦和州淨營運虧空抵押品預計將減少當前年度和未來年度的有效稅率。

公司的 預估到2025年第一季末，剩餘預期聯邦稅損抵扣金額約為$32,800,000。考慮凈營運虧損後，小州應稅收入導致截至2024年9月30日的凈營運虧損抵扣递延稅資產降至約$8,500,000。 評估準備金相應調整，仍然完全抵消了凈递延稅資產，因有足夠的負面證據支持保留完整的評估準備金，除非遇到飛凡、罕見項目，否則發生了連續三年的累積稅收虧損。

公司保持著一個專注於強化其知識產權的方案，特別是該公司特定的專利組合。公司通過對某些涉嫌侵犯公司知識產權的方提起訴訟來執行其知識產權。

patents relating to its wireless headphone technology. If efforts are successful, the Company may receive royalties, offers to purchase its intellectual property, or other remedies advantageous to its competitive position from time to time. However, there is no guarantee of a positive outcome from these efforts in the future, which could ultimately be time-consuming and unsuccessful. Additionally, the Company may owe all or a portion of any future proceeds arising from the enforcement program to third parties.

The Company believes that its financial position remains strong. The Company had $2.8 million of cash and cash equivalents, $9.1 million of short-term investments and available credit facilities of $5.0 million on September 30, 2024.

Recent Trends

Recent and ongoing macroeconomic and geopolitical conditions have impacted, and will continue to impact, our business. These include economic uncertainty from elevated inflation and interest rates, reduced consumer confidence, disruption in our supply chain and trade tensions with China, the ongoing crises in Eastern Europe, the continued conflict in the Middle East and increased risk of cyberattacks.

While the impact of these factors on our fiscal 2025 performance remains uncertain, we will continue to evaluate the extent to which these factors will impact our business, financial condition, or results of operations. These and other uncertainties with respect to these recent events could result in changes to our current expectations.

Inflationary Cost Environment and Reduced Consumer Confidence - Inflation, higher interest rates and higher energy costs continue to impact consumers’ discretionary spending and, in turn, the Company’s sales volumes. Inflation may impact customer demand for our products resulting from a slowdown in consumers’ willingness to spend as disposable income decreases due to rising prices of essential items, spend through of excess savings from earlier in the pandemic and leading indicators pointing to a softening in the labor market. While inflation rates have come down since the prior year, the Company is still experiencing higher costs of commodities, packaging materials, and wages, along with higher energy and transportation costs. The Company continues to monitor costs and will react with pricing actions as it deems necessary. The Company continues to work with a dedicated freight forwarding partner to minimize freight rate increases. Other risk factors further exacerbated by inflation include supply chain disruptions, increased oil and energy costs, risks of international operations and the recruitment and retention of talent.

Supply Chain Disruption and Trade Tensions with China - The Company relies on our third-party supply chain, primarily in southern China, and distribution networks and the availability of necessary components to produce a considerable number of our products. A reduction or interruption in supply, including interruptions due to pandemic related restrictions, geopolitical unrest, labor shortages or strikes, or a failure to procure adequate components, may lead to delays in manufacturing or increases in costs.

Many of the Company’s products are sourced from contract manufacturing facilities in the People’s Republic of China and Taiwan. There has been increasing geopolitical tension between China and Taiwan that may affect future shipments from Taiwan-based suppliers. Any other adverse changes in the social, political, regulatory or economic conditions in the countries could materially increase the cost of the products we buy from our foreign suppliers or delay shipments of products. There has also been increasing geopolitical tension between China and the United States. Sustained uncertainty about, or worsening of, economic relations and further escalation of trade tensions between the United States and China, or any other country in which the Company conducts business, could result in retaliatory trade restrictions that restrict our ability to source products from China or continue business in such other country. Any alterations to our business strategy or operations made in order to adapt to or comply with any such changes would be time-consuming and expensive, and the Company may not be able to pass along most increases in tariffs and freight charges to the Company’s customers, which would also directly affect profits.

On Monday, October 1, 2024, the International Longshoremen’s Association (the “ILA”) called a coast-wide strike, temporarily closing the U.S. East Coast and Gulf Coast ports, affecting the movement of import and export containers. On Thursday, October 3rd, the ILA and the United States Maritime Alliance, Ltd. (USMX) reached a tentative agreement on wages and to extend the Master Contract until January 15, 2025, to return to the bargaining table to negotiate all other outstanding issues. Work resumed at most ports along the US East and US Gulf coasts on Friday, October 4th. While some residual delays may occur as port operations gradually return to full capacity, the Company is aware that a final agreement will not be concluded until the end of the second quarter of the fiscal year and could still have a significant impact on its operations in the second half of the fiscal year. The Company will, however, continue to monitor this situation and others that may arise as the changes in the current labor landscape, the settlement of recent labor disputes, coupled with rising energy prices, could potentially exacerbate disruptions in the supply chain, delay product shipments and increase transportation costs.

Russia’s Invasion of Ukraine - Financial and credit markets around the world experienced volatility following the invasion of Ukraine by Russia in February 2022. In response to the invasion, the United States, United Kingdom, and European Union, along with others, imposed significant sanctions and export controls against Russia, Russian banks and certain Russian individuals and may implement additional sanctions or take further punitive actions in the future. In accordance with Executive Order 14071 signed on April 6, 2022,

the Company suspended sales to Russia. While there is a humanitarian crisis in Ukraine created by the war and the population continues to seek refuge in other countries, the Company did receive a sizable order from their Ukrainian distributor in the first quarter of fiscal year 2024 with potential for more orders in the current year. During the three months ended September 30, 2024 and 2023, there were no sales to Russia.

Cyberattacks - Cyberattacks are a growing geopolitical risk, becoming larger, more frequent, more sophisticated and more relentless as technology has evolved, resulting in privacy, security, and compliance concerns. They are a significant threat to individual organizations and national security. High-profile security breaches at other companies and in government agencies have increased in recent years, and security industry experts and government officials have warned about the risks of hackers and cyberattacks targeting businesses. We rely on accounting, financial, and operational management information systems to conduct our operations. Any disruption in these systems could adversely affect our ability to conduct our business. Furthermore, as part of our normal business activities, we collect and store common confidential information about customers, employees, vendors, and suppliers. This information is entitled to protection under a number of regulatory regimes. Any failure to maintain the security of the data, including the penetration of our network security and the misappropriation of confidential and personal information, could result in business disruption, damage to our reputation, financial obligations to third parties, fines, penalties, regulatory proceedings and private litigation with potentially large costs, and also result in deterioration in customers confidence in us and other competitive disadvantages, and thus could have a material adverse impact on our financial condition and results of operations. While we devote resources to security measures to protect our systems and data, these measures cannot provide absolute security and there is a risk that these types of attacks could impact the entire supply and distribution chain for the Company’s product line. In a world that runs on the internet, the Company can only be as strong as its weakest link, whether as a financial service provider, third party distributor, reseller, transportation service provider, contract manufacturer, customer or consumer.

‎

Liquidity and Capital Resources

Cash Flows

The following table summarizes cash flows from operating, investing and financing activities for the three months ended September 30, 2024 and 2023:

Operating Activities

The cash provided by operating activities during the three months ending September 30, 2024, was primarily a result of customer deposits for orders shipping in the next quarter. Also contributing to the positive cash flow was the refund of $362,000 by the Company’s payroll vendor relating to employee payroll taxes on the gains from the disqualifying dispositions of incentive stock options as the Company has now chosen to issue the checks directly to the employees. Cash outflow for the premium payments made for the annual renewal of the Company’s general insurance policies partially offset the cash that came in. During the three months ended September 30, 2023, the cash used in operating activities was due to payment of bonuses earned in the prior year, general insurance premiums and state income tax payments. The Company’s strict management of its inventory investment helped to retain some cash in the first quarter.

Investing Activities

Cash used by investing activities for the three months ended September 30, 2024 was related mostly to fixed asset expenditures, namely the replacement of a second roof section of the building, and the payment of the premiums on the company-owned life insurance policies on two of its executives. Proceeds of $5,034,000 received during the three months ended September 30, 2024 from the maturity of U.S. Treasury securities were mostly reinvested to purchase $5,057,000 of similar securities at a $58,000 discount. Cash used by investing activities for the three months ended September 30, 2023 was also related to fixed asset expenditures, predominantly the replacement of a roof section of the building for approximately $300,000. The Company also paid the premiums on the company-owned life insurance policies on two of its executives.

Financing Activities

Cash from the exercise of stock options during the three months ended September 30, 2024 provided the only cash from financing activities. An aggregate of 51,000 shares of common stock were issued as a result of employee stock option exercises under grants still outstanding from the Company’s 2012 Omnibus Incentive Plan. There were no stock option exercises in the first quarter of the prior fiscal year.

As of September 30, 2024 and June 30, 2024, the Company had no outstanding borrowings on its bank line of credit facility.

There were no purchases of common stock in the three months ended September 30, 2024 or 2023 under the stock repurchase program. 

Liquidity

The Company believes its existing cash and cash equivalents, investments in short-term U.S. Treasury securities, cash provided by operating activities and borrowings under its credit facility, if any, will be sufficient to meet its anticipated working capital, and capital expenditure requirements during the next twelve months. There can be no assurance, however, that the Company’s business will continue to generate cash flow at current levels. If the Company is unable to generate sufficient cash flow from operations, then it may be required to sell assets, reduce capital expenditures, or draw on its credit facilities. The Company regularly evaluates new product offerings, inventory levels and capital expenditures to ensure that it is effectively allocating resources in line with current market conditions.

Credit Facility

On May 14, 2019, the Company entered into a secured credit facility (“Credit Agreement”) with Town Bank (“Lender”). The Credit Agreement provides for a $5,000,000 revolving secured credit facility for letters of credit for the benefit of the Company of up to a

sublimit of $1,000,000. There are no unused line fees in the credit facility. On January 28, 2021, the Credit Agreement was amended to extend the expiration date to October 31, 2022, and to change the interest rate to Wall Street Journal Prime less 1.50%. A Third Amendment to the Credit Agreement effective October 30, 2022, extended the expiration date to October 31, 2024. A Fourth Amendment to the Credit Agreement effective October 30, 2024, extends the maturity date to October 31, 2026, and removes one of the covenants requiring submission of annual financial performance projections to the Lender. The Company and the Lender also entered into a General Business Security Agreement dated May 14, 2019 under which the Company granted the Lender a security interest in substantially all of the Company’s assets in connection with the Company’s obligations under the Credit Agreement. The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type. The negative covenants include restrictions on other indebtedness, liens, fundamental changes, certain investments, disposition of assets, mergers and liquidations, among other restrictions. As of September 30, 2024, the Company was in compliance with all covenants related to the Credit Agreement. As of September 30, 2024 and June 30, 2024, there were no outstanding borrowings on the facility. 

Contractual Obligation

The Company leases its 126,000 square foot facility from Koss Holdings, LLC, which is controlled by five equal ownership interests in trusts held by the five beneficiaries of a former chairman’s revocable trust and includes current stockholders of the Company. On May 24, 2022, the lease was renewed for a period of five years, ending June 30, 2028, and is being accounted for as an operating lease. The lease extension maintained the rent at a fixed rate of $380,000 per year. The Company has the option to renew the lease for an additional five years beginning July 1, 2028 and ending June 30, 2033 under the same terms and conditions except that the annual rent will increase to $397,000. The negotiated increase in rent slated for 2028 will be the first increase in rent since 1996. The Company is responsible for all property maintenance, insurance, taxes and other normal expenses related to ownership. The facility is in good repair and, in the opinion of management, is suitable and adequate for the Company’s business purposes.

Critical Accounting Policies and Estimates

There have been no significant changes in our critical accounting policies and estimates from the information we provided in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Off-Balance Sheet Transactions

At September 30, 2024, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

‎

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

Not applicable. 

Item 4.    Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are designed to ensure that: (1) information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (2)  such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

The Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2024. The Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures as of September 30, 2024 were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) that occurred during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1.    Legal Proceedings

As part of its intellectual property enforcement program, on July 22, 2020, the Company brought patent infringement suits against certain parties, including Bose Corporation, PEAG, LLC d/b/a jLab Audio and Skullcandy, Inc., alleging infringement of the Company’s patents relating to its wireless headphone technology and seeking monetary relief and attorneys’ fees. These lawsuits are pending in U.S. District Courts in District of Massachusetts (Bose Corporation), Southern District of California (PEAG, LLC), and District of Utah (Skullcandy, Inc.).

Item 1A.    Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part 1. Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, as filed with the Securities and Exchange Commission on August 30, 2024. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by any forward-looking statements contained in this report. There have been no material changes to the risk factors described under “Risk Factors,” included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

‎

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information with respect to purchases of common stock of the Company made during the three months ended September 30, 2024, by the Company.

COMPANY REPURCHASES OF EQUITY SECURITIES

(1)In April of 1995, the Board of Directors approved a stock repurchase program authorizing the Company to purchase from time to time up to $2,000,000 of its common stock for its own account. Subsequently, the Board of Directors periodically has approved increases in the stock repurchase program. The most recent increase was for an additional $2,000,000 in October 2006, for a maximum of $45,500,000 of which $43,360,247 had been expended through September 30, 2024.

‎

Item 6.    Exhibits

__________________________

*    Filed herewith

**  Furnished herewith

# Management contract or compensatory plan

 
‎

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.