The scope of the Company's previously disclosed internal investigation ofunauthorized financial transactions has been expanded to include fiscalyears since 2006 and to the present. Preliminary estimates indicate thatthe amount of unauthorized transactions since fiscal year 2006 through thepresent may exceed $20 million, but at this point the Company and itsadvisors cannot assess the potential impact on its financial statements oridentify the extent that specific fiscal periods may be affected. Nor canthe Company and its advisors yet assess the extent of the possible offsetsthrough insurance, asset recoveries and other mechanisms related to theunauthorized transactions. As a result, the Company has concluded that itspreviously issued financial statements at least since the end of its 2006fiscal year should no longer be relied upon. The Company plans to restateits financial statements for such periods as further investigationindicates.

The Company's internal investigation, supervised by an independentcommittee of the board of directors, including the committee's independentcounsel and forensic accountants, is continuing, as are efforts to recovermerchandise related to the unauthorized transactions. The Companycontinues to work with law enforcement and regulatory authorities.

Koss Corporation markets a complete line of high-fidelity stereophone,speaker-phones, computer headsets, telecommunications headsets, activenoise canceling stereophones, wireless stereophones, and compact discrecordings of American Symphony Orchestras on the Koss Classics label.

This press release contains forward-looking statements. These statementsrelate to future events or our future financial performance. In some cases,you can identify forward-looking statements by terminology such as "may,""will," "should," "forecasts," "expects," "plans," "anticipates,""believes," "estimates," "predicts," "potential," or "continue" or thenegative of such terms and other comparable terminology. These statementsare only predictions. Actual events or results may differ materially. Inevaluating forward-looking statements, you should specifically considervarious factors that may cause actual results to vary from those containedin the forward-looking statements, such as general economic conditions, inparticular, consumer demand for the Company's and its customers' products,competitive and technological developments, foreign currency fluctuations,and costs of operations. Shareholders, potential investors and otherreaders are urged to consider these factors carefully in evaluating theforward-looking statements and are cautioned not to place undue reliance onsuch forward-looking statements. The forward-looking statements made hereinare only made as of the date of this press release and the Companyundertakes no obligation to publicly update such forward-looking statementsto reflect subsequent events or circumstances. In addition, suchuncertainties and other operational matters are discussed further in theCompany's quarterly and annual filings with the Securities and ExchangeCommission.