x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
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Delaware
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39-1168275
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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4129 North Port Washington Avenue, Milwaukee, Wisconsin
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53212
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock $0.005 par value per share
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The Nasdaq Stock Market LLC
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NONE
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
x
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(Do not check if a smaller reporting company)
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|
|
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Page
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PART I
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|
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PART II
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|
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Part III
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PART IV
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2016
|
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2015
|
||||
United States
|
|
$
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15,496,763
|
|
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$
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16,779,312
|
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Sweden
|
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4,322,582
|
|
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3,677,225
|
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Czech Republic
|
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1,231,731
|
|
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441,754
|
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Hong Kong
|
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1,121,609
|
|
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—
|
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People's Republic of China
|
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969,848
|
|
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193,374
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Malaysia
|
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669,782
|
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262,600
|
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Canada
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400,672
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498,026
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All other countries
|
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1,788,359
|
|
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2,377,765
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Net sales
|
|
$
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26,001,346
|
|
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$
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24,230,056
|
|
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||||
Quarter Ended
|
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High
|
|
Low
|
||||
September 30, 2014
|
|
$
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3.45
|
|
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$
|
1.85
|
|
December 31, 2014
|
|
$
|
2.15
|
|
|
$
|
1.26
|
|
March 31, 2015
|
|
$
|
2.90
|
|
|
$
|
1.80
|
|
June 30, 2015
|
|
$
|
3.50
|
|
|
$
|
2.21
|
|
September 30, 2015
|
|
$
|
2.61
|
|
|
$
|
2.14
|
|
December 31, 2015
|
|
$
|
2.96
|
|
|
$
|
1.91
|
|
March 31, 2016
|
|
$
|
2.35
|
|
|
$
|
1.51
|
|
June 30, 2016
|
|
$
|
2.45
|
|
|
$
|
1.93
|
|
Period (2016)
|
|
Total
Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plan (1)
|
|
Approximate Dollar Value of
Shares Available under
Repurchase Plan
|
||||||
April 1-April 30
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,139,753
|
|
May 1-May 31
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,139,753
|
|
June 1-June 30
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
2,139,753
|
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
•
|
Net sales increased
7.3%
to
$26,001,346
on volume gains with distributors in Asia, Scandinavia, and the Czech Republic as well as a new distributor in Africa. There was also a new original equipment manufacturer ("OEM") customer that had significant sales in fiscal 2016.
|
•
|
Gross profit as a percent of sales decreased
0.5%
to
34.4%
. This change was primarily due to mix of sales by product and by channel.
|
•
|
Selling, general and administrative spending was higher as a result of higher costs for deferred compensation, profit-based compensation, 401(k) match and travel costs. These higher costs were largely offset by lower stock-based compensation, reduced compensation for the former Chairman's retirement, lower commissions and reduced legal fees.
|
•
|
Unauthorized transaction related recoveries increased due to settling the lawsuit with American Express.
|
Consolidated Performance Summary
|
|
2016
|
|
2015
|
||
Net sales
|
|
$26,001,346
|
|
$24,230,056
|
||
Net sales increase %
|
|
7.3
|
%
|
|
1.6
|
%
|
Gross profit
|
|
$8,942,572
|
|
$8,448,567
|
||
Gross profit as % of net sales
|
|
34.4
|
%
|
|
34.9
|
%
|
Selling, general and administrative expenses
|
|
$7,959,460
|
|
$7,904,739
|
||
Selling, general and administrative expenses as % of net sales
|
|
30.6
|
%
|
|
32.6
|
%
|
Unauthorized transaction related (recoveries) costs, net
|
|
$(1,286,001)
|
|
$31,027
|
||
Interest expense
|
|
$6,075
|
|
$12,813
|
||
Income before income tax provision
|
|
$2,263,038
|
|
$499,988
|
||
Income before income tax provision as % of net sales
|
|
8.7
|
%
|
|
2.1
|
%
|
Income tax provision
|
|
$874,038
|
|
$17,375
|
||
Income tax provision as % of income before taxes
|
|
38.6
|
%
|
|
3.5
|
%
|
|
|
2016
|
|
2015
|
||||
Total cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
314,625
|
|
|
$
|
(340,590
|
)
|
Investing activities
|
|
(579,498
|
)
|
|
(558,555
|
)
|
||
Financing activities
|
|
—
|
|
|
—
|
|
||
Net (decrease) in cash and cash equivalents
|
|
$
|
(264,873
|
)
|
|
$
|
(899,145
|
)
|
Years Ended June 30,
|
|
2016
|
|
2015
|
||||
Net sales
|
|
$
|
26,001,346
|
|
|
$
|
24,230,056
|
|
Cost of goods sold
|
|
17,058,774
|
|
|
15,781,489
|
|
||
Gross profit
|
|
8,942,572
|
|
|
8,448,567
|
|
||
|
|
|
|
|
||||
Selling, general and administrative expenses
|
|
7,959,460
|
|
|
7,904,739
|
|
||
Unauthorized transaction related (recoveries) costs, net
|
|
(1,286,001
|
)
|
|
31,027
|
|
||
Interest expense
|
|
6,075
|
|
|
12,813
|
|
||
Income before income tax provision
|
|
2,263,038
|
|
|
499,988
|
|
||
|
|
|
|
|
||||
Income tax provision
|
|
874,038
|
|
|
17,375
|
|
||
|
|
|
|
|
||||
Net income
|
|
$
|
1,389,000
|
|
|
$
|
482,613
|
|
|
|
|
|
|
||||
Income per common share:
|
|
|
|
|
||||
Basic
|
|
$
|
0.19
|
|
|
$
|
0.07
|
|
Diluted
|
|
$
|
0.19
|
|
|
$
|
0.07
|
|
As of June 30,
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
735,393
|
|
|
$
|
1,000,266
|
|
Accounts receivable, less allowance for doubtful accounts of $55,175 and
$26,052, respectively |
|
3,530,854
|
|
|
2,823,980
|
|
||
Inventories
|
|
8,595,485
|
|
|
7,182,440
|
|
||
Prepaid expenses and other current assets
|
|
281,099
|
|
|
348,044
|
|
||
Income taxes receivable
|
|
583,507
|
|
|
205,531
|
|
||
Total current assets
|
|
13,726,338
|
|
|
11,560,261
|
|
||
|
|
|
|
|
||||
Equipment and leasehold improvements, net
|
|
1,514,472
|
|
|
1,592,520
|
|
||
|
|
|
|
|
||||
Other assets:
|
|
|
|
|
|
|
||
Deferred income taxes
|
|
3,212,556
|
|
|
3,914,569
|
|
||
Cash surrender value of life insurance
|
|
5,667,105
|
|
|
5,359,663
|
|
||
Total other assets
|
|
8,879,661
|
|
|
9,274,232
|
|
||
|
|
|
|
|
||||
Total assets
|
|
$
|
24,120,471
|
|
|
$
|
22,427,013
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
1,966,656
|
|
|
$
|
2,172,254
|
|
Accrued liabilities
|
|
1,601,652
|
|
|
1,575,027
|
|
||
Total current liabilities
|
|
3,568,308
|
|
|
3,747,281
|
|
||
|
|
|
|
|
||||
Long-term liabilities:
|
|
|
|
|
|
|
||
Deferred compensation
|
|
2,187,714
|
|
|
2,107,486
|
|
||
Other liabilities
|
|
178,255
|
|
|
219,227
|
|
||
Total long-term liabilities
|
|
2,365,969
|
|
|
2,326,713
|
|
||
|
|
|
|
|
||||
Total liabilities
|
|
5,934,277
|
|
|
6,073,994
|
|
||
|
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
|
|
||
Common stock, $0.005 par value, authorized 20,000,000 shares; issued and
outstanding 7,382,706 shares |
|
36,914
|
|
|
36,914
|
|
||
Paid in capital
|
|
5,070,956
|
|
|
4,626,781
|
|
||
Retained earnings
|
|
13,078,324
|
|
|
11,689,324
|
|
||
Total stockholders' equity
|
|
18,186,194
|
|
|
16,353,019
|
|
||
|
|
|
|
|
||||
Total liabilities and stockholders' equity
|
|
$
|
24,120,471
|
|
|
$
|
22,427,013
|
|
Years Ended June 30,
|
|
2016
|
|
2015
|
||||
Operating activities:
|
|
|
|
|
|
|
||
Net income
|
|
$
|
1,389,000
|
|
|
$
|
482,613
|
|
Adjustments to reconcile net income to net cash provided by (used in)
operating activities: |
|
|
|
|
||||
Provision for doubtful accounts
|
|
28,514
|
|
|
25,725
|
|
||
Loss on disposal of equipment and leasehold improvements
|
|
40,710
|
|
|
14,953
|
|
||
Depreciation of equipment and leasehold improvements
|
|
487,134
|
|
|
559,631
|
|
||
Stock-based compensation expense
|
|
444,175
|
|
|
630,539
|
|
||
Deferred income taxes
|
|
702,013
|
|
|
284,783
|
|
||
Change in cash surrender value of life insurance
|
|
(177,740
|
)
|
|
(150,312
|
)
|
||
Change in deferred compensation accrual
|
|
230,228
|
|
|
(12,605
|
)
|
||
Deferred compensation paid
|
|
(150,000
|
)
|
|
(50,000
|
)
|
||
Net changes in operating assets and liabilities (see note 14)
|
|
(2,679,409
|
)
|
|
(2,125,917
|
)
|
||
Cash provided by (used in) operating activities
|
|
314,625
|
|
|
(340,590
|
)
|
||
|
|
|
|
|
||||
Investing activities:
|
|
|
|
|
|
|
||
Life insurance premiums paid
|
|
(129,702
|
)
|
|
(231,942
|
)
|
||
Purchase of equipment and leasehold improvements
|
|
(449,796
|
)
|
|
(326,613
|
)
|
||
Cash (used in) investing activities
|
|
(579,498
|
)
|
|
(558,555
|
)
|
||
|
|
|
|
|
||||
Net (decrease) in cash and cash equivalents
|
|
(264,873
|
)
|
|
(899,145
|
)
|
||
Cash and cash equivalents at beginning of year
|
|
1,000,266
|
|
|
1,899,411
|
|
||
Cash and cash equivalents at end of year
|
|
$
|
735,393
|
|
|
$
|
1,000,266
|
|
|
|
Common Stock
|
|
Paid in
|
|
Retained
|
|
|
|||||||||||
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Total
|
|||||||||
Balance, June 30, 2014
|
|
7,382,706
|
|
|
$
|
36,914
|
|
|
$
|
3,996,242
|
|
|
$
|
11,206,711
|
|
|
$
|
15,239,867
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
482,613
|
|
|
482,613
|
|
||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
630,539
|
|
|
—
|
|
|
630,539
|
|
||||
Balance, June 30, 2015
|
|
7,382,706
|
|
|
36,914
|
|
|
4,626,781
|
|
|
11,689,324
|
|
|
16,353,019
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,389,000
|
|
|
1,389,000
|
|
||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
444,175
|
|
|
—
|
|
|
444,175
|
|
||||
Balance, June 30, 2016
|
|
7,382,706
|
|
|
$
|
36,914
|
|
|
$
|
5,070,956
|
|
|
$
|
13,078,324
|
|
|
$
|
18,186,194
|
|
|
|
2016
|
|
2015
|
||||
Legal fees incurred
|
|
$
|
1,714,074
|
|
|
$
|
152,492
|
|
Gross proceeds from the settlement of the third party lawsuit
|
|
(3,000,000
|
)
|
|
—
|
|
||
Proceeds from asset forfeitures
|
|
(75
|
)
|
|
(121,465
|
)
|
||
Unauthorized transaction related (recoveries) costs, net
|
|
$
|
(1,286,001
|
)
|
|
$
|
31,027
|
|
Fiscal Year Ended
June 30, |
|
Balance,
beginning of year |
|
Provision
charged to expense |
|
Amounts
written-off |
|
Recoveries of previously written-off
|
|
Balance,
end of year |
|||||||
2016
|
|
$
|
26,052
|
|
|
28,514
|
|
|
(447
|
)
|
|
1,056
|
|
|
$
|
55,175
|
|
2015
|
|
$
|
20,501
|
|
|
25,725
|
|
|
(20,174
|
)
|
|
—
|
|
|
$
|
26,052
|
|
|
|
2016
|
|
2015
|
||||
Raw materials
|
|
$
|
3,466,907
|
|
|
$
|
5,374,333
|
|
Finished goods
|
|
7,570,026
|
|
|
6,246,072
|
|
||
|
|
11,036,933
|
|
|
11,620,405
|
|
||
Reserve for obsolete inventory
|
|
(2,441,448
|
)
|
|
(4,437,965
|
)
|
||
Total inventories
|
|
$
|
8,595,485
|
|
|
$
|
7,182,440
|
|
|
|
Estimated
useful lives
|
|
2016
|
|
2015
|
||||
Machinery and equipment
|
|
5-10 years
|
|
$
|
592,189
|
|
|
$
|
642,200
|
|
Furniture and office equipment
|
|
5-10 years
|
|
373,716
|
|
|
374,616
|
|
||
Tooling
|
|
5 years
|
|
4,299,776
|
|
|
4,126,850
|
|
||
Display booths
|
|
5 years
|
|
253,680
|
|
|
287,180
|
|
||
Computer equipment
|
|
3-5 years
|
|
768,620
|
|
|
1,414,517
|
|
||
Leasehold improvements
|
|
3-15 years
|
|
2,387,626
|
|
|
2,308,246
|
|
||
Assets in progress
|
|
N/A
|
|
210,189
|
|
|
60,600
|
|
||
|
|
|
|
8,885,796
|
|
|
9,214,209
|
|
||
Less: accumulated depreciation and amortization
|
|
|
|
7,371,324
|
|
|
7,621,689
|
|
||
Equipment and leasehold improvements, net
|
|
|
|
$
|
1,514,472
|
|
|
$
|
1,592,520
|
|
Year Ended June 30,
|
|
2016
|
|
2015
|
||||
Current:
|
|
|
|
|
|
|
||
Federal
|
|
$
|
169,350
|
|
|
$
|
(100,126
|
)
|
State
|
|
2,675
|
|
|
(167,282
|
)
|
||
Deferred
|
|
702,013
|
|
|
284,783
|
|
||
Total income tax provision
|
|
$
|
874,038
|
|
|
$
|
17,375
|
|
Year Ended June 30,
|
|
2016
|
|
2015
|
||||
Federal income tax expense at statutory rate
|
|
$
|
769,433
|
|
|
$
|
169,996
|
|
State income tax expense (benefit), net of federal income tax benefit
|
|
91,660
|
|
|
(21,442
|
)
|
||
Decrease in valuation allowance
|
|
(370,000
|
)
|
|
—
|
|
||
Stock-based compensation
|
|
447,180
|
|
|
53,596
|
|
||
Adjustments for unrecognized tax benefits
|
|
—
|
|
|
(175,000
|
)
|
||
Other
|
|
(64,235
|
)
|
|
(9,775
|
)
|
||
Total income tax provision
|
|
$
|
874,038
|
|
|
$
|
17,375
|
|
|
|
2016
|
|
2015
|
||||
Deferred income tax assets:
|
|
|
|
|
|
|
||
Deferred compensation
|
|
$
|
864,954
|
|
|
$
|
835,270
|
|
Stock-based compensation
|
|
603,159
|
|
|
889,325
|
|
||
Accrued expenses and reserves
|
|
1,390,910
|
|
|
2,075,601
|
|
||
Federal and state net operating loss carryforwards
|
|
418,296
|
|
|
463,237
|
|
||
Valuation allowance
|
|
(409
|
)
|
|
(370,409
|
)
|
||
Equipment and leasehold improvements
|
|
—
|
|
|
11,566
|
|
||
Other
|
|
5,979
|
|
|
14,650
|
|
||
Total deferred income tax assets
|
|
3,282,889
|
|
|
3,919,240
|
|
||
|
|
|
|
|
||||
Deferred income tax liabilities:
|
|
|
|
|
|
|
||
Equipment and leasehold improvements
|
|
(67,390
|
)
|
|
—
|
|
||
Other
|
|
(2,943
|
)
|
|
(4,671
|
)
|
||
Net deferred income tax assets
|
|
$
|
3,212,556
|
|
|
$
|
3,914,569
|
|
|
|
2016
|
|
2015
|
||||
Unrecognized tax benefits at beginning of year
|
|
$
|
—
|
|
|
$
|
175,000
|
|
Reductions based on settlements with taxing authorities
|
|
—
|
|
|
(175,000
|
)
|
||
Unrecognized tax benefits at end of year
|
|
$
|
—
|
|
|
$
|
—
|
|
Year Ended June 30,
|
|
Balance,
beginning
of year
|
|
Increase in
valuation
allowance
|
|
Release of
valuation
allowance
|
|
Balance,
end of year
|
||||||
2016
|
|
$
|
(370,409
|
)
|
|
—
|
|
|
370,000
|
|
|
$
|
(409
|
)
|
2015
|
|
$
|
(370,409
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(370,409
|
)
|
|
|
2016
|
|
2015
|
||||
Cooperative advertising and promotion allowances
|
|
$
|
479,645
|
|
|
$
|
400,114
|
|
Product warranty obligations
|
|
305,275
|
|
|
312,664
|
|
||
Customer credit balances
|
|
47,753
|
|
|
261,977
|
|
||
Current deferred compensation
|
|
150,000
|
|
|
150,000
|
|
||
Accrued returns
|
|
140,918
|
|
|
97,026
|
|
||
Employee benefits
|
|
83,113
|
|
|
93,568
|
|
||
Legal and professional fees
|
|
127,329
|
|
|
70,000
|
|
||
Management bonuses and profit-sharing
|
|
147,450
|
|
|
71,381
|
|
||
Sales commissions and bonuses
|
|
70,050
|
|
|
68,890
|
|
||
Other
|
|
50,119
|
|
|
49,407
|
|
||
|
|
$
|
1,601,652
|
|
|
$
|
1,575,027
|
|
Year Ended June 30,
|
|
Balance,
beginning
of year
|
|
Provision
charged to
expense
|
|
Warranty
expenses
incurred
|
|
Balance,
end of year
|
||||||
2016
|
|
$
|
531,891
|
|
|
214,827
|
|
|
(263,188
|
)
|
|
$
|
483,530
|
|
2015
|
|
$
|
722,624
|
|
|
103,925
|
|
|
(294,658
|
)
|
|
$
|
531,891
|
|
|
|
2016
|
|
2015
|
||
Expected stock price volatility
|
|
50
|
%
|
|
43
|
%
|
Risk free interest rate
|
|
1.48
|
%
|
|
1.52
|
%
|
Expected dividend yield
|
|
4.00
|
%
|
|
4.00
|
%
|
Expected forfeitures
|
|
5.60
|
%
|
|
1.50
|
%
|
Expected life of options
|
|
4.5 years
|
|
|
4.6 years
|
|
|
|
Number of
Shares |
|
Stock
Options Price Range |
|
Weighted
Average Exercise Price |
|
Weighted
Average Remaining Contractual Life - Years |
|
Aggregate
Intrinsic Value of In-The- Money Options |
|||||
Shares under option at June 30, 2014
|
|
2,066,000
|
|
|
$3.90 - $13.09
|
|
$
|
5.97
|
|
|
4.13
|
|
$
|
—
|
|
Granted
|
|
470,000
|
|
|
$2.24 - $3.30
|
|
$
|
3.14
|
|
|
|
|
|
||
Exercised
|
|
—
|
|
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
Expired
|
|
(201,000
|
)
|
|
$4.97 - $13.09
|
|
$
|
7.06
|
|
|
|
|
|
|
|
Forfeited
|
|
(90,000
|
)
|
|
$3.00 - $6.00
|
|
$
|
4.69
|
|
|
|
|
|
|
|
Shares under option at June 30, 2015
|
|
2,245,000
|
|
|
$2.24 - $13.09
|
|
$
|
5.33
|
|
|
3.69
|
|
$
|
1,676
|
|
Granted
|
|
410,000
|
|
|
$2.05 - $2.83
|
|
$
|
2.72
|
|
|
|
|
|
|
|
Exercised
|
|
—
|
|
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
Expired
|
|
(458,000
|
)
|
|
$3.00 - $13.09
|
|
$
|
6.25
|
|
|
|
|
|
|
|
Forfeited
|
|
(57,000
|
)
|
|
$3.00 - $6.00
|
|
$
|
4.34
|
|
|
|
|
|
|
|
Shares under option at June 30, 2016
|
|
2,140,000
|
|
|
$2.05 - $9.74
|
|
$
|
4.66
|
|
|
3.51
|
|
$
|
—
|
|
Exercisable as of June 30, 2015
|
|
1,134,500
|
|
|
$3.90 - $13.09
|
|
$
|
6.01
|
|
|
2.18
|
|
$
|
—
|
|
Exercisable as of June 30, 2016
|
|
1,084,000
|
|
|
$2.24 - $9.74
|
|
$
|
5.57
|
|
|
2.47
|
|
$
|
—
|
|
|
|
2016
|
|
2015
|
||||
Total intrinsic value of stock options exercised
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash received from stock option exercises
|
|
$
|
—
|
|
|
$
|
—
|
|
Total fair value of stock options vested
|
|
$
|
583,727
|
|
|
$
|
696,958
|
|
|
|
2016
|
|
2015
|
||||
Accounts receivable
|
|
$
|
(735,388
|
)
|
|
$
|
311,182
|
|
Inventories
|
|
(1,413,045
|
)
|
|
(127,508
|
)
|
||
Income taxes receivable
|
|
(377,976
|
)
|
|
903,745
|
|
||
Prepaid expenses and other current assets
|
|
66,945
|
|
|
(199,844
|
)
|
||
Income taxes payable
|
|
—
|
|
|
(175,000
|
)
|
||
Accounts payable
|
|
(205,598
|
)
|
|
(292,501
|
)
|
||
Accrued liabilities
|
|
26,625
|
|
|
(2,428,446
|
)
|
||
Other liabilities
|
|
(40,972
|
)
|
|
(117,545
|
)
|
||
Net change
|
|
$
|
(2,679,409
|
)
|
|
$
|
(2,125,917
|
)
|
|
|
|
|
|
||||
Net cash paid (refunded) during the year for:
|
|
|
|
|
|
|
||
Income taxes
|
|
$
|
558,202
|
|
|
$
|
(985,585
|
)
|
Interest
|
|
$
|
6,075
|
|
|
$
|
12,813
|
|
|
|
2016
|
|
2015
|
||||
United States
|
|
$
|
15,496,763
|
|
|
$
|
16,779,312
|
|
Sweden
|
|
4,322,582
|
|
|
3,677,225
|
|
||
Czech Republic
|
|
1,231,731
|
|
|
441,754
|
|
||
Hong Kong
|
|
1,121,609
|
|
|
—
|
|
||
People's Republic of China
|
|
969,848
|
|
|
193,374
|
|
||
Malaysia
|
|
669,782
|
|
|
262,600
|
|
||
Canada
|
|
400,672
|
|
|
498,026
|
|
||
All other countries
|
|
1,788,359
|
|
|
2,377,765
|
|
||
Net sales
|
|
$
|
26,001,346
|
|
|
$
|
24,230,056
|
|
•
|
On December 17, 2010, the Company filed an action against Park Bank in Circuit Court of Milwaukee County, Wisconsin alleging a claim of breach of the Uniform Fiduciaries Act relating to the unauthorized transactions, as previously reported. In 2015, Park Bank filed third party claims based on contribution and subrogation against Grant Thornton LLP and Michael Koss. The Court granted motions to dismiss the contribution claims against Grant Thornton LLP and Michael Koss, but determined that it was premature to decide the subrogation claims at this stage of the proceedings. On or around March 11, 2016, the Court entered an order granting Park Bank's motion for summary judgment that dismissed the case. On March 22, 2016, the Company filed a Notice of Appeal that appeals the order granting Park Bank's motion for summary judgment and the Court's denial of the motion to dismiss the subrogation claims.
|
KOSS CORPORATION
|
|
||
|
|
||
By:
|
/s/ Michael J. Koss
|
|
August 25, 2016
|
|
Michael J. Koss
|
|
|
|
Chairman
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ David D. Smith
|
|
August 25, 2016
|
|
David D. Smith
|
|
|
|
Executive Vice President
|
|
|
|
Chief Financial Officer
|
|
|
|
Principal Accounting Officer
|
|
|
|
Secretary
|
|
|
/s/ Michael J. Koss
|
|
/s/ Thomas L. Doerr
|
Michael J. Koss, Director
|
|
Thomas L. Doerr, Director
|
|
|
|
|
|
|
/s/ Steven A. Leveen
|
|
/s/ Theodore H. Nixon
|
Steven A. Leveen, Director
|
|
Theodore H. Nixon, Director
|
|
|
|
|
|
|
/s/ William J. Sweasy
|
|
|
William J. Sweasy, Director
|
|
|
Exhibit No.
|
Exhibit Description
|
|
|
3.1
|
Amended and Restated Certificate of Incorporation of Koss Corporation, as in effect on November 19, 2009. Filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 2009 and incorporated herein by reference.
|
|
|
3.2
|
By-Laws of Koss Corporation. Filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the year ended June 30, 1996 and incorporated herein by reference.
|
|
|
10.1
|
Death Benefit Agreement with John C. Koss. Filed as Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the year ended June 30, 1996 and incorporated herein by reference. *
|
|
|
10.2
|
Stock Purchase Agreement with John C. Koss. Filed as Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year ended June 30, 1996 and incorporated herein by reference. *
|
|
|
10.3
|
Salary Continuation Resolution for John C. Koss. Filed as Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the year ended June 30, 1996 and incorporated herein by reference. *
|
|
|
10.4
|
1983 Incentive Stock Option Plan. Filed as Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the year ended June 30, 1996 and incorporated herein by reference. *
|
|
|
10.5
|
1990 Flexible Incentive Plan. Filed as Exhibit 25 to the Company’s Annual Report on Form 10-K for the year ended June 30, 1990 and incorporated herein by reference. *
|
|
|
10.6
|
Consent of Directors (Supplemental Executive Retirement Plan for Michael J. Koss dated March 7, 1997). Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 and incorporated herein by reference. *
|
|
|
10.7
|
Credit Agreement dated May 12, 2010, between Koss Corporation and JPMorgan Chase Bank, N.A. Filed as Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 and incorporated by reference herein.
|
|
|
10.8
|
Pledge and Security Agreement dated May 12, 2010, between Koss Corporation and JPMorgan Chase Bank, N.A. Filed as Exhibit 10.13 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 and incorporated by reference herein.
|
|
|
10.9
|
Koss Corporation 2012 Omnibus Incentive Plan (Incorporated by reference to Appendix B to Koss Corporation's Definitive Proxy Statement on Schedule 14A filed on August 27, 2012). *
|
|
|
10.10
|
Amendment No. 2 dated July 24, 2013 to Credit Agreement dated May 12, 2010, between Koss Corporation and JPMorgan Chase Bank, N.A. Filed as Exhibit 10.15 to the Company's Annual Report on Form 10-K for the year ended June 30, 2014, and incorporated by reference herein.
|
|
|
10.11
|
Amendment No. 3 dated July 23, 2014 to Credit Agreement dated May 12, 2010, between Koss Corporation and JPMorgan Chase Bank, N.A. Filed as Exhibit 10.16 to the Company's Annual Report on Form 10-K for the year ended June 30, 2014, and incorporated by reference herein.
|
|
|
10.12
|
Amendment No. 4 dated July 29, 2015 to Credit Agreement dated May 12, 2010, between Koss Corporation and JPMorgan Chase Bank, N.A. Filed as Exhibit 10.12 to the Company's Annual Report on Form 10-K for the year ended June 30, 2015, and incorporated by reference herein.
|
|
|
10.13
|
Amendment No. 5 dated May 31, 2016 to Credit Agreement dated May 12, 2010, between Koss Corporation and JPMorgan Chase Bank, N.A. **
|
|
|
14
|
Koss Corporation Code of Ethics. Filed as Exhibit 14 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2011 and incorporated by reference herein.
|
|
|
23.1
|
Consent of Baker Tilly Virchow Krause, LLP. **
|
|
|
31.1
|
Rule 13a -14(a)/15d-14(a) Certification of Chief Executive Officer. **
|
|
|
31.2
|
Rule 13a -14(a)/15d-14(a) Certification of Chief Financial Officer. **
|
|
|
32.1
|
Section 1350 Certification of Chief Executive Officer. ***
|
|
|
32.2
|
Section 1350 Certification of Chief Financial Officer. ***
|
|
|
101
|
The following financial information from Koss Corporation's Annual Report on Form 10-K for the year ended June 30, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Income for the years ended June 30, 2016 and 2015, (ii) Consolidated Balance Sheets as of June 30, 2016 and 2015, (iii) Consolidated Statements of Cash Flows for the years ended June 30, 2016 and 2015, (iv) Consolidated Statements of Stockholders' Equity for the years ended June 30, 2016 and 2015 and (v) the Notes to Consolidated Financial Statements.
|
*
|
|
Denotes a management contract or compensatory plan or arrangement
|
**
|
|
Filed herewith
|
***
|
|
Furnished herewith
|
a.
|
All references to the Credit Agreement in the Credit Agreement or any of the Loan Documents shall refer to the Credit Agreement as amended hereby.
|
b.
|
Section 1.01 (Defined Terms) shall be amended as follows:
|
c.
|
Section 3.11 (Disclosure) shall be amended to read as follows:
|
d.
|
Section 5.01 (Financial Covenants; Borrowing Base and Other Information) shall be amended such that clause (e) thereof shall read as follows:
|
e.
|
Section 6.12(a) (Financial Covenants – Minimum EBITDA) shall be amended in its entirety to read as follows:
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
August 25, 2016
|
|
|
|
/s/ Michael J. Koss
|
|
Michael J. Koss
|
|
Chief Executive Officer and President
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
August 25, 2016
|
|
|
|
/s/ David D. Smith
|
|
David D. Smith
|
|
Executive Vice President and
|
|
Chief Financial Officer
|
|
|
/s/ Michael J. Koss
|
|
Michael J. Koss
|
|
Chief Executive Officer and President
|
|
August 25, 2016
|
|
/s/ David D. Smith
|
|
David D. Smith
|
|
Executive Vice President and
|
|
Chief Financial Officer
|
|
August 25, 2016
|