What the changes say
- Acquisition activity is now a stated expansion strategy, adding integration and target-selection risk.
- Cybersecurity coverage broadened to third-party systems and AI-enabled fraud, privacy, accuracy and compliance risks.
- Amazon represented over 22% of fiscal 2026 net sales, up from over 19% in fiscal 2025.
- Trade and geopolitical risks remain central, while international sales fell to nearly 17% of net sales from 30%.
What changed since the prior 10-K
New
- NewOperational and Financial Risks
Future acquisitions or other strategic transactions could negatively impact our reputation, business, financial position, results of operations and cash flows
Future acquisitions may be difficult to find, may not generate sufficient revenue, or may fail to integrate successfully.
- NewOperational and Financial Risks
Cybersecurity threats or other disruptions to our information systems, or those of our third-party service providers, could adversely affect our business
Cyberattacks affecting Koss or third-party providers could disrupt reporting, inventory, orders and communications, or expose protected information.
- NewOperational and Financial Risks
Artificial intelligence may increase cybersecurity, operational and fraud risks
AI could make cyberattacks and impersonation fraud more effective, while Koss’s AI use creates privacy, accuracy, intellectual-property and compliance risks.
- NewRisks Related to our Stock
The market price of our common stock may be volatile and may fluctuate significantly
Koss’s stock price may fluctuate significantly; fiscal 2026 reported highs and lows were $8.59 and $3.50.
- NewRisks Related to our Stock
landscape. The conflicts have exacerbated regional instability, impacted global shipping lanes and increased energy and raw material costs
U.S.-China tensions could bring tariffs or restrictions that raise manufacturing, sourcing, shipping and input costs and extend lead times.
Dropped
- DroppedOperational and Financial Risks
elements 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
- DroppedOperational and Financial Risks
An information systems interruption, cyberattack or breach in security could adversely affect our business
- DroppedRisks Related to our Stock
Our stock price has been, and may in the future, be subject to significant fluctuations and volatility
Reworded
- 83% rewrittenRisks Related to our International Operations
A 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
The discussion shifts from specific 2025 tariff rates and the temporary truce to court invalidation of IEEPA tariffs and continuing import-duty uncertainty.
- 82% rewrittenRisks Related to our Stock
Geopolitical tensions, armed conflicts and acts of terrorism could adversely affect our business, financial condition, and results of operations
The geopolitical discussion now specifically includes the U.S.-Iran conflict and describes potential additional sanctions, tariffs and trade restrictions.
- 72% rewrittenOperational and Financial Risks
Changes in tax laws and unanticipated tax liabilities could adversely affect our effective income tax rate and profitability
The OBBB Act discussion was removed; the risk now emphasizes changing tax interpretations, possible higher liabilities and deferred tax assets.
- 38% rewrittenOperational and Financial Risks
The 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
No substantive change; Koss still sources over 90% of products from contract manufacturers in China and Taiwan.
- 32% rewrittenRisks Related to our Stock
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
International sales declined from nearly 30% to nearly 17% of net sales, while higher borrowing costs replaced sustained higher interest rates.
- 25% rewrittenOperational and Financial Risks
Direct-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
Amazon’s share of net sales increased to more than 22% in fiscal 2026 from more than 19% in fiscal 2025.
All 26 risk factors
Headings as the filing states them, in filing order.
Risks Related to our International Operations
- 01We may be subject to risks related to doing business in, and having counterparties based in, foreign countries
- 02A shift in U.S. and China trade relations, policies and imposed tariffs could adversely affect the Company’s business, financial condition and results of operations83% rewritten
- 03Fluctuations 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
- 04The 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 operations38% rewritten
- 05Failure to attract and retain customers to sell the Company’s products could adversely affect sales volume and future profitability
- 06A shift in customer specifications to lower priced items can reduce profit margins, negatively impacting profitability
- 07If we are unable to continue to develop innovative and popular products, our brand image may be harmed and demand for our products may decrease
- 08We may not be able to compete effectively, which could cause our net sales and market share to decline
- 09 engaging in length y and costly intellectual property and other legal disputes
- 10If 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
- 11We may be adversely affected by the financial condition of our retailers and distributors
- 12Direct-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 results25% rewritten
- 13Our products may experience quality problems from time to time that can result in decreased sales and operating margin and harm to our reputation
- 14Future acquisitions or other strategic transactions could negatively impact our reputation, business, financial position, results of operations and cash flowsNew
- 15Cybersecurity threats or other disruptions to our information systems, or those of our third-party service providers, could adversely affect our businessNew
- 16Artificial intelligence may increase cybersecurity, operational and fraud risksNew
- 17Changes in tax laws and unanticipated tax liabilities could adversely affect our effective income tax rate and profitability72% rewritten
Risks Related to our Stock
- 18The market price of our common stock may be volatile and may fluctuate significantlyNew
- 19A “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
- 20The 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
- 21Future 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
- 22The 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 position32% rewritten
- 23Political 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
- 24Geopolitical tensions, armed conflicts and acts of terrorism could adversely affect our business, financial condition, and results of operations82% rewritten
- 25landscape. The conflicts have exacerbated regional instability, impacted global shipping lanes and increased energy and raw material costsNew
- 26Our business, financial condition and results of operations may be adversely impacted by the effects of inflation
Other KOSS 10-Ks
- FY2025 10-K risk factors24 risks
Koss relies almost exclusively on Chinese contract manufacturing, facing up to 145% tariffs implemented in April 2025. Direct-to-consumer sales via Amazon exceed 19% of net sales in fiscal 2025. Stock volatility and extreme price fluctuations are driven heavily by social media hype and potential short squeezes.
Filed Aug 29, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.