UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
for the quarterly period ended
OR
Commission File Number
(Exact Name of Registrant as Specified in its Charter)
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(State or other jurisdiction of |
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incorporation or organization) |
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(Address of principal executive offices) |
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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 No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☐ |
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| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.). Yes ☐ No
At May 2, 2022, there were
KOSS CORPORATION
FORM 10-Q
March 31, 2022
INDEX
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
KOSS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
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| March 31, 2022 |
| June 30, 2021 | ||
ASSETS |
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Current assets: |
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Cash and cash equivalents | $ | |
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Accounts receivable, less allowance for doubtful accounts of $ |
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Inventories, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Equipment and leasehold improvements, net |
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Other assets: |
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Operating lease right-of-use asset |
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Cash surrender value of life insurance |
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Total other assets |
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Total assets | $ | |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable | $ | |
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Accrued liabilities |
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Deferred revenue |
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Operating lease liability |
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Income taxes payable |
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Total current liabilities |
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Long-term liabilities: |
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Deferred compensation |
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Deferred revenue |
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Operating lease liability |
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Total long-term liabilities |
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Total liabilities |
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Stockholders' equity: |
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Common stock, $ |
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Paid in capital |
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Retained earnings |
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Total stockholders' equity |
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Total liabilities and stockholders' equity | $ | |
| $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
KOSS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
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| Three Months Ended |
| Nine Months Ended | ||||||||
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| March 31 | ||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 | ||||
Net sales | $ | |
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Cost of goods sold |
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Gross profit |
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Selling, general and administrative expenses |
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Income (loss) from operations |
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Other income |
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Interest income |
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Income (loss) before income tax provision |
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Income tax provision |
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Net income (loss) | $ | |
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Income (loss) per common share: |
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Basic | $ | |
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Diluted | $ | |
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Weighted-average number of shares: |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
KOSS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
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| Nine Months Ended | ||||
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| 2022 |
| 2021 | ||
Operating activities: |
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Net income | $ | |
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Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
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(Recovery of) provision for doubtful accounts of accounts receivable |
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Depreciation of equipment and leasehold improvements |
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Stock-based compensation expense |
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Change in cash surrender value of life insurance |
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Provision for deferred compensation |
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Deferred compensation paid |
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Deferred compensation relieved |
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Other income - SBA loan forgiveness |
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Other income - Net gain from life insurance benefits |
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Loss on disposal of fixed assets |
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Net changes in operating assets and liabilities: |
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Accounts receivable |
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Inventories |
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Prepaid expenses and other current assets |
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Income taxes payable |
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Accounts payable |
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Accrued liabilities |
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Deferred revenue |
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Net cash provided by operating activities |
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Investing activities: |
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Purchase of equipment and leasehold improvements |
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Life insurance premiums paid |
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Proceeds from life insurance policy |
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Net cash provided by (used in) investing activities |
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Financing activities: |
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Proceeds from exercise of stock options |
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Net cash provided by financing activities |
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Net increase in cash and cash equivalents |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period | $ | |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
KOSS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
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| Nine Months Ended March 31, 2022 | ||||||||||||
| Common Stock |
| Paid in |
| Retained |
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| Shares |
| Amount |
| Capital |
| Earnings |
| Total | ||||
Balance, June 30, 2021 | |
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Net income | — |
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Stock-based compensation expense | — |
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Stock option exercises | |
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Balance, March 31, 2022 | |
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| Nine Months Ended March 31, 2021 | ||||||||||||
| Common Stock |
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| Retained |
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| Shares |
| Amount |
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| Earnings |
| Total | ||||
Balance, June 30, 2020 | |
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Net income | — |
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Stock-based compensation expense | — |
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Stock option exercises | |
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Balance, March 31, 2021 | |
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| Three Months Ended March 31, 2022 | ||||||||||||
| Common Stock |
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| Retained |
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| Shares |
| Amount |
| Capital |
| Earnings |
| Total | ||||
Balance, December 31, 2021 | |
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Net income | — |
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Stock-based compensation expense | — |
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Stock option exercises | — |
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Balance, March 31, 2022 | |
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| Three Months Ended March 31, 2021 | ||||||||||||
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| Earnings |
| Total | ||||
Balance, December 31, 2020 | |
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Net (loss) | — |
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Stock-based compensation expense | — |
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Stock option exercises | |
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Balance, March 31, 2021 | |
| $ | |
| $ | |
| $ | |
| $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
KOSS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(Unaudited)
The condensed consolidated balance sheets as of March 31, 2022 and June 30, 2021, the condensed consolidated statements of operations for the three and nine months ended March 31, 2022 and 2021, the condensed consolidated statements of cash flows for the nine months ended March 31, 2022 and 2021, and the condensed consolidated statements of stockholders' equity for the three and nine months ended March 31, 2022 and 2021, have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and have not been audited. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made. The operating results for any interim period are not necessarily indicative of the operating results that may be experienced for the full fiscal year.
Certain information and footnote disclosure normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021.
A state tax provision of $3,575 and $5,638 was recorded for the three and nine months ended March 31, 2022. For the three and nine months ended March 31, 2021, the state tax provision was $
In December 2021, the Company recognized approximately $
The Company’s deferred compensation liabilities are for a current and former officer and are calculated based on various assumptions which may include compensation, years of service, expected retirement date, discount rates, and mortality tables. The related expense is calculated using the net present value of the expected payments and is included in selling, general and administrative expenses in the condensed consolidated statements of operations. The Company’s current and non-current compensation obligations are included in accrued liabilities and deferred compensation, respectively, in the condensed consolidated balance sheets.
The components of inventories were as follows:
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| March 31, 2022 |
| June 30, 2021 | ||
Raw materials | $ | |
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Finished goods |
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Inventories, gross |
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Reserve for obsolete inventory |
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