KOSS (KOSS) risk factors, FY2025 10-K

Macroeconomic and Political Risks

1. 01The 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
2. 02Political 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
3. 03Geopolitical tensions, armed conflicts and acts of terrorism could adversely affect our business, financial condition, and results of operations
4. 04Our business, financial condition and results of operations may be adversely impacted by the effects of inflation

Risks Related to our International Operations

1. 05We may be subject to risks related to doing business in, and having counterparties based in, foreign countries
2. 06A shift in U.S. and China trade relations, policies and imposed tariffs could adversely affect the Company’s business, financial condition and results of operations
3. 07Fluctuations in currency exchange rates could affect the Company’s financial results and operations, including with respect to pricing of products and overall demand for the Company’s products

Operational and Financial Risks

1. 08The Company is dependent on the proper functioning of our contract manufacturers, our supply chain, and our distribution networks. Any disruptions could adversely affect our business, financial condition or results of operations
2. 09elements such as raw materials or other product components, transportation, work force, or force majeure events. Our inability to mitigate any of these disruptions may lead to a material adverse impact on our business, financial condition and results of operations
3. 10Failure to attract and retain customers to sell the Company’s products could adversely affect sales volume and future profitability
4. 11A shift in customer specifications to lower priced items can reduce profit margins, negatively impacting profitability
5. 12If we are unable to continue to develop innovative and popular products, our brand image may be harmed and demand for our products may decrease
6. 13We may not be able to compete effectively, which could cause our net sales and market share to decline
7. 14engaging in lengthy and costly intellectual property and other legal disputes
8. 15If we are unable to obtain intellectual property rights and/or enforce those rights against third parties who are violating those rights, our business could suffer
9. 16We may be adversely affected by the financial condition of our retailers and distributors
10. 17Direct-to-Consumer sales through the Amazon marketplace account for a significant amount of our net sales and the loss of, or reduced purchases from, this sales channel could have a material adverse effect on our operating results
11. 18Our products may experience quality problems from time to time that can result in decreased sales and operating margin and harm to our reputation
12. 19An information systems interruption, cyberattack or breach in security could adversely affect our business
13. 20Changes in tax laws and unanticipated tax liabilities could adversely affect our effective income tax rate and profitability

Risks Related to our Stock

1. 21Our stock price has been, and may in the future, be subject to significant fluctuations and volatility
2. 22A “short squeeze” due to a sudden increase in demand for shares of our common stock that largely exceeds supply could lead to extreme price volatility in shares of our common stock
3. 23The Koss family, including certain members of our management, owns a significant percentage of our stock and, as a result, the trading price for our shares may be depressed and it can take actions that may be adverse to the interests of our stockholders
4. 24Future sales of a substantial amount of our common stock in the public markets by our insiders, or the perception that these sales may occur, may cause the market price of our common stock to decline