<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   Form 10-Q

             [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                  for the quarterly period ended September 30, 1996

                                       OR

             [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934


Commission File Number 0-3295
- --------------------------------------------------------------------------------
KOSS CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)


A DELAWARE CORPORATION                        39-1168275
- --------------------------------------------------------------------------------
(State or other jurisdiction of      (I.R.S. Employer Identification No.)
incorporation or organization)


4129 North Port Washington Avenue, Milwaukee, Wisconsin       53212
- --------------------------------------------------------------------------------
(Address of principal executive office)                    (Zip Code)


Registrant's telephone number, including area code:  (414) 964-5000
                                                     ---------------------------


Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                 YES  X  NO 
                                     ---    ---

At September 30, 1996, there were 3,288,098 shares outstanding of the
Registrant's common stock, $0.01 par value per share.



                                    1 of 11


<PAGE>   2

                       KOSS CORPORATION AND SUBSIDIARIES
                                   FORM 10-Q
                               September 30, 1996


                                     INDEX



                                                                         Page

PART I   FINANCIAL INFORMATION


         Item 1       Financial Statements

                      Condensed Consolidated Balance Sheets
                      September 30, 1996 (Unaudited) and June 30, 1996     3

                      Condensed Consolidated Statements
                      of Income (Unaudited)
                      Three months ended September 30, 1996 and 1995       4

                      Condensed Consolidated Statements of Cash
                      Flows (Unaudited)
                      Three months ended September 30, 1996 and 1995       5

                      Notes to Condensed Consolidated Financial

                      Statements (Unaudited) September 30, 1996            6-7


         Item 2       Management's Discussion and Analysis of
                      Financial Condition and Results of Operations        8-9



PART II  OTHER INFORMATION


         Item 4       Submission of Matters to a Vote of Security-Holders  10


         Item 6       Exhibits and Reports on Form 8-K                     10










                                    2 of 11


<PAGE>   3

                       KOSS CORPORATION AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS





<TABLE>
<CAPTION>
                                                  September 30, 1996  June 30, 1996
                                                     (Unaudited)           (*)
                                                  ------------------------------------
<S>                                               <C>                 <C>
  ASSETS
     Current Assets:
       Cash                                                 $440,311         $27,001
       Accounts receivable                                 9,413,549       8,965,213
       Inventories                                        11,451,637       8,777,216
       Prepaid expenses                                      516,854         382,137
       Deferred income taxes                                 517,946         517,946
- --------------------------------------------------------------------------------------
         Total current assets                             22,340,297      18,669,513
    Property and Equipment, net                            2,416,724       2,344,341
    Deferred Income Taxes                                    422,603         422,603
    Intangible and Other Assets                              555,276         568,800
- --------------------------------------------------------------------------------------
                                                         $25,734,900     $22,005,257
======================================================================================
LIABILITIES AND STOCKHOLDERS' INVESTMENT

  Current Liabilities:
     Accounts payable                                     $1,050,200      $1,327,915
     Accrued liabilities                                     805,073         786,353
     Income taxes payable                                    591,806         361,855
- --------------------------------------------------------------------------------------
       Total current liabilities                           2,447,079       2,476,123
  Long-Term Debt                                           3,620,000         470,000
  Deferred Compensation and Other Liabilities              1,051,114       1,022,344
  Contingently Redeemable Equity Interest                  1,490,000       1,490,000
  Stockholders' Investment                                17,126,707      16,546,790
- --------------------------------------------------------------------------------------
                                                         $25,734,900     $22,005,257
======================================================================================
</TABLE>


* The balance sheet at June 30, 1996, has been prepared from the audited
financial statements at that date.

See accompanying notes.




                                    3 of 11


<PAGE>   4

                       KOSS CORPORATION AND SUBSIDIARIES

                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)



<TABLE>
<CAPTION>
Three Months Ended September 30         1996         1995
- ----------------------------------------------------------------
<S>                                 <C>          <C>
Net sales                            $9,862,803    $9,588,544
Cost of goods sold                    6,575,125     6,443,923
- ----------------------------------------------------------------
Gross profit                          3,287,678     3,144,621
Selling, general and
  administrative expense              2,096,669     2,140,745
- ----------------------------------------------------------------
Income from operations                1,191,009     1,003,876
Other income (expense)
  Royalty income                        268,485       388,992
  Interest income                         4,034         4,125
  Interest expense                     (42,279)      (27,168)
- ----------------------------------------------------------------
Income before income tax provision    1,421,249     1,369,825
Provision for income taxes              582,259       561,713
- ----------------------------------------------------------------
  Net income                           $838,990      $808,112
================================================================
Number of common and common
  equivalent shares used in
  computing earnings per share        3,350,768     3,565,202
================================================================
Earnings per common and common
equivalent share                          $0.25         $0.23
================================================================
Dividends per common share                 None          None
================================================================
</TABLE>


See accompanying notes.







                                    4 of 11


<PAGE>   5

                       KOSS CORPORATION AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)



<TABLE>
<CAPTION>
Three Months Ended September 30                            1996           1995
- -------------------------------------------------------------------------------------
<S>                                                    <C>            <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
  Net income                                                $838,990       $808,112
  Adjustments to reconcile net
    income to net cash provided (used)
    by operating activities:
      Depreciation and amortization                          225,290        225,746
      Deferred compensation and other liabilities             28,770         28,770
      Net changes in operating assets and
        liabilities                                       (3,310,497)    (2,667,654)
- -------------------------------------------------------------------------------------
      Net cash used in operating activities:              (2,217,447)    (1,605,026)
- -------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
  Acquisition of equipment
    and leasehold improvements                              (277,673)       (92,553)
- -------------------------------------------------------------------------------------
    Net cash used in
      investing activities                                  (277,673)       (92,553)
- -------------------------------------------------------------------------------------
CASH FLOWS FROM
FINANCING ACTIVITIES:
  Repayments under line of credit agreements              (3,395,000)    (2,650,000)
  Borrowings under line of credit agreements               6,545,000      4,255,000
  Purchase and retirement of common stock                   (260,320)            --
  Exercise of stock options                                   18,750         48,750
- -------------------------------------------------------------------------------------
    Net cash provided
      by financing activities                              2,908,430      1,653,750
- -------------------------------------------------------------------------------------
Net increase (decrease) in cash                              413,310        (43,829)
Cash at beginning of year                                     27,001         49,227
- -------------------------------------------------------------------------------------
Cash at end of quarter                                      $440,311         $5,398
=====================================================================================
</TABLE>


See accompanying notes









                                    5 of 11



<PAGE>   6

                       KOSS CORPORATION AND SUBSIDIARIES
                               September 30, 1996
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

      The financial statements presented herein are based on interim figures
      and are subject to audit.  In the opinion of management, all adjustments
      (consisting only of normal recurring accruals) necessary to present
      fairly the financial position, results of operations and cash flows at
      September 30, 1996, and for all periods presented have been made.

      Certain information and footnote disclosures normally included in
      financial statements prepared in accordance with generally accepted
      accounting principles have been condensed or omitted.  It is suggested
      that these condensed consolidated financial statements be read in
      conjunction with the financial statements and notes thereto included in
      the Registrant's June 30, 1996, Annual Report on Form 10-K.  The income
      from operations for the quarter ended September 30, 1996 is not
      necessarily indicative of the operating results for the full year.

2.    EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE

      Earnings per share are computed based on the average number of common and
      common share equivalents outstanding.  When dilutive, stock options are
      included as share equivalents using the Treasury stock method.  Common
      stock equivalents of 45,919 and 68,070 related to stock option grants
      were included in the computation of the average number of shares
      outstanding in 1996 and 1995 respectively.

3.   INVENTORIES

      The classification of inventories is as follows:




<TABLE>
<CAPTION>
                   September 30, 1996  June 30, 1996
- -----------------------------------------------------
<S>                <C>                 <C>
Raw materials and
 work in process           $7,189,409     $4,751,156
Finished goods              4,900,010      4,663,842
- -----------------------------------------------------
                           12,089,419      9,414,998
LIFO Reserve                 (637,782)      (637,782)
- -----------------------------------------------------
                          $11,451,637     $8,777,216
=====================================================
</TABLE>






                                    6 of 11


<PAGE>   7

4.    STOCK PURCHASE AGREEMENT

      The Company has an agreement with its Chairman to repurchase stock from
      his estate in the event of his death.  The repurchase price is 95% of the
      fair market value of the common stock on the date that notice to
      repurchase is provided to the Company.  The total number of shares to be
      repurchased shall be sufficient to provide proceeds which are the lesser
      of $2,500,000 or the amount of estate taxes and administrative expenses
      incurred by his estate.  The Company is obligated to pay in cash 25% of
      the total amount due and to execute a promissory note at a prime rate of
      interest for the balance.  The Company maintains a $1,150,000 life
      insurance policy to fund a substantial portion of this obligation.  At
      September 30, 1996 and June 30, 1996, $1,490,000 has been classified as a
      Contingently Redeemable Equity Interest reflecting the estimated
      obligation in the event of execution of the agreement.

5.    DEFERRED COMPENSATION

      In 1991, the Board of Directors agreed to continue John C. Koss' current
      base salary in the event he becomes disabled prior to age 70.  After age
      70, Mr. Koss shall receive his current base salary for the remainder of
      his life, whether or not he becomes disabled.  The Company is currently
      recognizing an annual expense of $115,080 in connection with this
      agreement, which represents the present value of the anticipated future
      payments.  At September 30, 1996 and June 30, 1996, respectively, the
      related liabilities in the amounts of $564,990 and $536,220 have been
      included in deferred compensation on the accompanying balance sheets.










                                    7 of 11


<PAGE>   8

                       KOSS CORPORATION AND SUBSIDIARIES
                                   FORM 10-Q
                               September 30, 1996

 
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition and Liquidity

Cash used by operating activities during the three months ended September 30,
1996 amounted to $2,217,447.  Working capital was $19,893,218 at September 30,
1996.  The increase of $3,699,828 from the balance at June 30, 1996 consists
primarily of an increase in inventory.  This increase is the result of
anticipated higher sales volume in the upcoming Christmas season.  The cash
necessary to fund the Company's operating activities fluctuates from time to
time; however, as a general rule, the Company expects to generate adequate
amounts of cash to meet future operating needs.  The Company maintains
sufficient borrowing capacity to fund any shortfall.

Capital expenditures for new property and equipment (including production
tooling) were $277,673 for the quarter.  For the fiscal year ending June 30,
1997, the Company expects its capital expenditures to be approximately
$1,500,000.  The Company expects to generate sufficient operating funds to
fulfill these expenditures.

Stockholders' investment increased to $17,126,707 at September 30, 1996, from
$16,546,790 at June 30, 1996.  The increase reflects primarily the income for
the quarter.  No cash dividends have been paid since the first quarter of
fiscal 1984.

The Company has an unsecured working capital credit facility with a bank which
runs through March 15, 1998.  This credit facility provides for borrowings up
to a maximum of $8,000,000.  Borrowings under this credit facility bear
interest at the bank's prime rate, or LIBOR plus 2.25%.  This credit facility
includes certain covenants that require the Company to maintain a minimum
tangible net worth and specified current, interest coverage, and leverage
ratios.  Utilization of this credit facility as of September 30, 1996 totaled
$3,827,938, consisting of $3,620,000 in borrowings and $207,938 in commitments
for foreign letters of credit.  Utilization of this credit facility as of June
30, 1996 was $944,784, consisting of $470,000 in borrowings of $474,784 in
foreign letters of credit.  The increase as of September 30, 1996 is the result
of an increase in inventory due to anticipated higher sales volume for the
upcoming Christmas season.  The Company also has a $2,000,000 credit facility
which can be used by the Company in the event the Company desires to purchase
shares of its own stock.  This credit facility runs through March
15, 1997.  The Company can also use up to $1,000,000 of its working capital
credit facility to purchase shares of its own stock.

The Company's Canadian subsidiary has a line of credit of $550,000, which is
guaranteed by the Company.  Borrowings under this credit facility bear interest
at the bank's prime rate plus 1.5%.  This credit facility is subject to the
availability of qualifying receivables and inventories which serve as security
for the borrowings.  As of September 30, 1996, there were no borrowings
outstanding against this line of credit.  The due date for the line is October
31, 1997.


                                    8 of 11


<PAGE>   9

In April, 1995 the Board of Directors authorized the Company's purchase from
time to time of its common stock for its own account utilizing the
aforementioned $2,000,000 credit facility.  In January of 1996, the Board of
Directors approved an increase in the total amount of potential stock purchases
for the Company's own account from $2,000,000 to $3,000,000.  The Company
intends to effectuate all stock purchases either on the open market or through
privately negotiated transactions, and intends to finance all stock purchases
through its own cash flow or by borrowing for such purchases.  For the quarter
ended September 30, 1996, the Company purchased 17,000 shares of its common
stock at a price of $6.975 per share, and retired all such shares.  The Company
also purchased 9,678 shares of its common stock for allocation to the Company's
Employee Stock Ownership Plan and Trust, for the fiscal year ended June 30,
1996, at a price of $6.975 per share.

Results of Operations

Net sales for the quarter ended September 30, 1996 were $9,862,803 compared
with $9,588,544 for the same period in 1995, an increase of $274,259.  Strong
orders primarily in August and September resulted in the increase for the
quarter.

Gross profit as a percent of net sales was 33% for the quarter ended September
30, 1996 compared with 33% in the prior year.

Selling, general and administrative expenses were $2,096,669 or 21% as against
$2,140,745 or 22% in 1995.

For the quarter ended September 30, 1996, income from operations was $1,191,009
versus $1,003,876 in 1995.  The $187,133 increase is primarily related to the
increased sales volume.

Net interest expense amounted to $42,279 for the quarter as compared to $27,168
for the same period in the prior year.  This increase is a result of increased
borrowing for the quarter as compared to the same period last year.

The Company has a license agreement with Trabelco N.V., a subsidiary of
Hagemeyer, N.V., a diverse international trading company based in the
Netherlands, which has business interests in food, appliances,
electromechanical and automobile distribution as well as a solid base of
consumer electronic distribution business in Asia, Europe and North America.
Royalty income earned in connection with this license agreement for the quarter
ended September 30, 1996 was $268,485 as compared to $388,992 for the same
period in 1995.  This decrease in royalty income is a result of Trabelco N.V. 
experiencing lower sales volumes on products under the license agreement.  The
license agreement expires December 31, 1997; however, it can be renewed for 
additional three year periods at the option of Trabelco N.V.

On September 29, 1995, the Company entered into a second License Agreement with
Trabelco N.V. covering most European countries.  At this time, no sales have
been reported under this License Agreement.




                                    9 of 11



<PAGE>   10


 
PART II    OTHER INFORMATION


   Item 4   Submission of Matters to Vote of Security-Holders


            (a)  On October 24, 1996 an Annual Meeting of Stockholders was held.

            (b)  Proxies for the election of directors were
                 solicited pursuant to Regulation 14, there was no solicitation
                 in opposition to management's nominees, and all such nominees
                 were elected.

            (c)  There were 3,288,098 shares of common stock
                 eligible to vote at the Annual Meeting, of which 2,845,065
                 shares were present at the Annual Meeting in person or by
                 proxy, which constituted a quorum.  The following is a summary
                 of the results of the voting:



<TABLE>
<CAPTION>
                                                          Number of Votes     Broker
                                                          ---------------     ------
                                                        For       Withheld   Non-Votes
                                                        ---       --------   ---------
             <S>                                  <C>            <C>         <C>         
              Nominees for 1-year
              terms ending in 1997:

              John C. Koss                            2,822,647    22,418      0                        
              Thomas L. Doerr                         2,818,359    26,706      0                        
              Victor L. Hunter                        2,822,947    22,118      0                        
              Michael J. Koss                         2,822,347    22,718      0                        
              Lawrence S. Mattson                     2,818,859    26,206      0                        
              Martin F. Stein                         2,822,447    22,618      0                        
              John J. Stollenwerk                     2,822,947    22,118      0                        
<CAPTION>
                                                                                                        
                                                  Number of Votes            Broker
                                                  ---------------            ------
                                          For      Against      Abstain     Non-Votes
                                          ---      -------      -------     ---------         
             <S>                      <C>          <C>         <C>         <C>         
              Appointment of Price
              Waterhouse L.L.P.
              as independent auditors
              for the year ended
              June 30, 1997           2,828,987    4,270         11,808         0
</TABLE>




   Item 6   Exhibits and Reports on Form 8-K


            (a)  Exhibits Filed
                 27 Financial Data Schedule

            (b)  Reports on Form 8-K
                 There were no reports on Form 8-K filed by the Company during
                 the period covered by this report.


                                    10 of 11


<PAGE>   11

                                   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 authorized.


                                      KOSS CORPORATION



            Dated: 11/13/96           /s/ John C. Koss
            ---------------           --------------------------------
                                      John C. Koss, Chairman
                                      on behalf of the Registrant

            Dated: 11/13/96           /s/ Michael J. Koss
            ---------------           --------------------------------    
                                      Michael J. Koss, President,
                                      Chief Executive Officer,
                                      Chief Financial Officer






























                                    11 of 11





<TABLE> <S> <C>

<ARTICLE> 5
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          JUN-30-1997
<PERIOD-START>                             JUL-01-1996
<PERIOD-END>                               SEP-30-1996
<CASH>                                          440311
<SECURITIES>                                         0
<RECEIVABLES>                                  9413549
<ALLOWANCES>                                         0
<INVENTORY>                                   11451637
<CURRENT-ASSETS>                              22340297
<PP&E>                                        12955435
<DEPRECIATION>                                10538711
<TOTAL-ASSETS>                                25734900
<CURRENT-LIABILITIES>                          2447079
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                         33180
<OTHER-SE>                                    25701720
<TOTAL-LIABILITY-AND-EQUITY>                  25734900
<SALES>                                        9862803
<TOTAL-REVENUES>                               9862803
<CGS>                                          6575125
<TOTAL-COSTS>                                  2096669
<OTHER-EXPENSES>                              (268485)
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                               42279
<INCOME-PRETAX>                                1421249
<INCOME-TAX>                                    582259
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    838950
<EPS-PRIMARY>                                        0
<EPS-DILUTED>                                      .25
        

</TABLE>