KOSSMEDIUM SIGNALOPERATIONAL10-K

KOSS expanded its direct-to-consumer capabilities while maintaining steady gross profit growth despite increased current liabilities and persistent negative operating cash flow.

The company's strategic shift toward diversified online sales channels, including marketplace expansion beyond just its website, positions it better for direct customer relationships and potentially higher margins. However, the 49.5% increase in current liabilities combined with continued negative operating cash flow suggests working capital management challenges that warrant monitoring.

Comparing 2025-08-29 vs 2024-08-30View on EDGAR →
FINANCIAL ANALYSIS

KOSS delivered moderate gross profit growth of 14.1% to $4.8M while modestly reducing R&D expenses by 10.2%. However, the company continues to generate negative operating cash flow at -$215K, and current liabilities increased nearly 50% to $1.9M, indicating potential strain on short-term liquidity and working capital management despite revenue growth.

FINANCIAL STATEMENT CHANGES
Current Liabilities
Balance Sheet
+49.5%
$1.3M→$1.9M

Current liabilities surged 49.5% — significant near-term obligations; verify ability to meet short-term debt.

Gross Profit
P&L
+14.1%
$4.2M→$4.8M

Gross profit expanding — improving pricing power or product mix shift toward higher-margin offerings.

Operating Cash Flow
Cash Flow
-12.8%
-$191K→-$215K

Operating cash flow softened — monitor whether temporary working capital timing or structural deterioration.

R&D Expense
P&L
-10.2%
$238K→$214K

R&D spending cut 10.2% — could signal cost discipline or concerning reduction in innovation investment.

LANGUAGE CHANGES
NEW — 2025-08-29
PRIOR — 2024-08-30
ADDED
On August 25, 2025, there were 9,456,438 shares outstanding of the registrant s common stock.
Approximately 84% of the Company s fiscal year 2025 sales were from stereo headphones used for listening to music.
As of June 30, 2025, the Company had over 400 trademarks registered in approximately 88 countries around the world and over 170 patents in approximately 26 countries.
Additionally, the Company fills direct-to-consumer ( DTC ) orders on its website and via online marketplaces.
In the fiscal years ended June 30, 2025 and 2024, the Company s largest sales concentration was represented by its own DTC offerings via the Amazon portal and were approximately 19% and 17% of net sales in fiscal years 2025 and 2024, respectively.
The Company s five largest customers accounted for approximately 50% and 46% of net sales in fiscal years 2025 and 2024, respectively.
RESEARCH AND DEVELOPMENT The Company s research and development activities are conducted by both Company personnel and outside consultants.
The Company did not engage any temporary personnel during the year ended June 30, 2025.
During the last two fiscal years, net sales of all Koss products were distributed as follows: 2025 2024 United States $ 8,968,799 $ 9,795,438 Sweden 1,247,981 993,043 Czech Republic 1,206,827 418,004 Korea, Republic of 207,061 185,143 Malaysia 156,976 41,641 Canada 131,320 101,056 Japan 114,438 66,682 All other countries 590,768 664,062 Net sales $ 12,624,170 $ 12,265,069 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.
In the years ended June 30, 2025 and 2024, there were no sales to Russia, however, sales to Ukraine resumed in fiscal year 2024 and those sales represented approximately 2% and 9% of the Company s export business during the fiscal years ended June 30, 2025 and 2024, respectively.
REMOVED
On August 26, 2024, there were 9,299,795 shares outstanding of the registrant s common stock.
Approximately 77% of the Company s fiscal year 2024 sales were from stereo headphones used for listening to music.
As of June 30, 2024, the Company had over 400 trademarks registered in approximately 91 countries around the world and over 160 patents in approximately 25 countries.
Additionally, the Company fills direct-to-consumer ( DTC ) orders on its website.
In the years ended June 30, 2024 and 2023, the Company s largest sales concentration was represented by its own DTC offerings via the Amazon portal and were approximately 17% and 20% of net sales in fiscal years 2024 and 2023, respectively.
The Company s five largest customers accounted for approximately 46% and 51% of net sales in fiscal years 2024 and 2023, respectively.
RESEARCH AND DEVELOPMENT The amount expensed on engineering and research activities relating to the development of new products or the improvement of existing products was $238,086 during fiscal year 2024.
These activities were conducted by both Company personnel and outside consultants.
There was $288,231 in expenses for research and development activities during fiscal year 2023.
The Company also engaged temporary personnel at times during the year ended June 30, 2024.
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