<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  March 31, 1997

                                       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 March 31, 1997, there were 3,316,291 shares outstanding of the Registrant's
common stock, $0.01 par value per share.











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                       KOSS CORPORATION AND SUBSIDIARIES
                                   FORM 10-Q
                                 March 31, 1997


                                     INDEX




                                                                       Page
  PART I   FINANCIAL INFORMATION

           Item 1    Financial Statements

                     Condensed Consolidated Balance Sheets
                     March 31, 1997 (Unaudited) and June 30, 1996        3

                     Condensed Consolidated Statements
                     of Income (Unaudited)
                     Quarter and nine months ended
                     March 31, 1997 and 1996                             4

                     Condensed Consolidated Statements of Cash
                     Flows (Unaudited)
                     Nine months ended March 31, 1997 and 1996           5


                     Notes to Condensed Consolidated Financial
                     Statements (Unaudited) March 31, 1997               6-7

           Item 2    Management's Discussion and Analysis of
                     Financial Condition and Results of Operations       8-10


  PART II  OTHER INFORMATION

           Item 6    Exhibits and Reports on Form 8-K                      10














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<PAGE>   3


                       KOSS CORPORATION AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS




<TABLE>
<CAPTION>
                                                    March 31, 1997   June 30, 1996
                                                     (Unaudited)          (*)
                                                  ----------------  --------------
<S>                                               <C>               <C>
ASSETS
Current Assets:
  Cash                                                 $   132,110     $    27,001
  Accounts receivable                                    7,363,338       8,965,213
  Inventories                                           13,977,012       8,777,216
  Prepaid expenses                                         305,710         382,137
  Income taxes receivable                                  497,347              --
  Deferred income taxes                                    517,946         517,946
----------------------------------------------------------------------------------
      Total current assets                              22,793,463      18,669,513

Property and Equipment, net                              2,550,321       2,344,341
Deferred Income Taxes                                      422,603         422,603
Intangible and Other Assets                                517,823         568,800
----------------------------------------------------------------------------------
                                                       $26,284,210     $22,005,257
==================================================================================
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
  Accounts payable                                     $ 1,457,823     $ 1,327,915
  Accrued liabilities                                      885,198         786,353
  Income taxes payable                                          --         361,855
----------------------------------------------------------------------------------
      Total current liabilities                          2,343,021       2,476,123

Long-Term Debt                                           2,066,000         470,000
Deferred Compensation and Other Liabilities              1,108,654       1,022,344
Contingently Redeemable Equity Interest                  1,490,000       1,490,000
Stockholders' Investment                                19,276,535      16,546,790
----------------------------------------------------------------------------------
                                                       $26,284,210     $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.







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<PAGE>   4


                       KOSS CORPORATION AND SUBSIDIARIES

                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)





<TABLE>
<CAPTION>
                                           Three Months               Nine Months
Period Ended March 31                  1997            1996       1997          1996
---------------------               -----------  ----------   ------------  -----------
<S>                                 <C>          <C>          <C>           <C>
Net sales                           $8,583,303   $8,482,620   $31,766,272   $27,941,603
Cost of goods sold                   5,660,609    6,018,141    21,011,785    19,450,431
---------------------------------------------------------------------------------------
Gross profit                         2,922,694    2,464,479    10,754,487     8,491,172
Selling, general and
 administrative expense              2,169,313    2,160,599     6,660,273     6,529,139
---------------------------------------------------------------------------------------
Income from operations                 753,381      303,880     4,094,214     1,962,033
Other income (expense)
 Royalty income                        212,244       43,769       908,619     1,112,498
 Interest income                        30,085        4,063        89,201        12,511
 Interest expense                      (77,099)     (12,109)     (254,527)      (72,458)
---------------------------------------------------------------------------------------
Income before income tax provision     918,611      339,603     4,837,507     3,014,584
Provision for income taxes             387,059      140,501     1,984,487     1,236,964
---------------------------------------------------------------------------------------
 Net income                         $  531,552   $  199,102   $ 2,853,020   $ 1,777,620
=======================================================================================
Number of common and common
 equivalent shares used in       
 computing earnings per share        3,463,071    3,478,695     3,347,605     3,536,361
=======================================================================================
Earnings per common and common
 equivalent share                   $     0.15   $     0.06   $      0.85   $      0.50
=======================================================================================
Dividends per common share                None         None          None          None
=======================================================================================
</TABLE>

See accompanying notes.

















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<PAGE>   5


                       KOSS CORPORATION AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)




<TABLE>
<CAPTION>

Nine Months Ended March 31                                1997          1996
--------------------------                            ------------  ------------
<S>                                                   <C>           <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
  Net income                                          $ 2,853,020    $1,777,620
  Adjustments to reconcile net    
    income to net cash (used) provided 
    by operating activities:           
       Depreciation and amortization                      516,998       434,167
       Deferred compensation and other liabilities         86,310        86,310
       Net changes in operating assets and             
         liabilities                                   (4,258,900)   (2,585,989)
-------------------------------------------------------------------------------
  Net cash used in operating activities:                 (802,572)     (287,892)
-------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
  Acquisition of equipment
    and leasehold improvements                           (672,002)     (242,043)
-------------------------------------------------------------------------------
    Net cash used in
      investing activities                               (672,002)     (242,043)
-------------------------------------------------------------------------------
CASH FLOWS FROM
FINANCING ACTIVITIES:
   Borrowings under line of credit agreements          17,765,000    11,971,000
   Repayments under line of credit agreements         (16,169,000)  (11,541,000)
   Purchase and retirement of common stock               (352,692)           --
   Exercise of stock options                              336,375        72,500
-------------------------------------------------------------------------------
     Net cash provided
       by financing activities                          1,579,683       502,500
-------------------------------------------------------------------------------
Net increase (decrease) in cash                           105,109       (27,435)
Cash at beginning of year                                  27,001        49,227
-------------------------------------------------------------------------------
Cash at end of period                                 $   132,110    $   21,792
===============================================================================
</TABLE>

See accompanying notes.










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<PAGE>   6


                       KOSS CORPORATION AND SUBSIDIARIES
                                 March 31, 1997
              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
      March 31, 1997, and for all periods presented have been made.  The income
      from operations for the quarter and nine months ended March 31, 1997 is
      not necessarily indicative of the operating results for the full year.

      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.

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 152,433 and 54,070 related to stock option grants
      were included in the computation of the average number of shares
      outstanding for the quarter ended March 31, 1997 and 1996, respectively.
      Common stock equivalent of 48,681 and 62,082 were outstanding for the
      nine months ended March 31, 1997 and 1996, respectively.

      The Financial Accounting Standards Board has issued Statement of
      Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128).
      SFAS 128 replaces primary EPS with basic EPS, which excludes dilution,
      and requires presentation of both basic and diluted EPS on the face of
      the income statement.  Diluted EPS is computed similarly to the current
      fully diluted EPS.  SFAS 128 is effective for financial statements issued
      for periods ending after December 15, 1997, and requires restatement of
      all prior-period EPS data presented.  The adoption of this statement is
      not expected to materially affect either future or prior-period EPS.

3.    INVENTORIES

      The classification of inventories is as follows:



<TABLE>
<CAPTION>
                   March 31, 1997  June 30, 1996
-----------------------------------------------
<S>                <C>             <C>

Raw materials and
 work in process     $ 6,847,695    $4,751,156       
Finished goods         7,767,099     4,663,842       
----------------------------------------------
                      14,614,794     9,414,998       
LIFO Reserve            (637,782)     (637,782)      
----------------------------------------------
                     $13,977,012    $8,777,216       
==============================================
</TABLE>

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<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
      March 31, 1997 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 March 31, 1997 and June 30, 1996, respectively, the related
      liabilities in the amounts of $622,530 and $536,220 have been included in
      deferred compensation in the accompanying balance sheets.
















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<PAGE>   8


                       KOSS CORPORATION AND SUBSIDIARIES
                           FORM 10-Q - March 31, 1997
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition and Liquidity

Cash used in operating activities during the nine months ended March 31, 1997
amounted to $802,572.  Working capital was $20,450,442 at March 31, 1997.  The
increase in working capital of $4,257,052 from the balance at June 30, 1996
reflects the net effect of an increase in inventory partially offset by
increased payables.  These increases are the result of anticipated higher sales
volume in the upcoming quarter.  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 $672,002 for the nine months ended March 31, 1997.  Depreciation
and amortization aggregated $516,998 for the nine months.  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 $19,276,535 at March 31, 1997, from
$16,546,790 at June 30, 1996.  The increase reflects primarily the income for
the nine month period ending March 31, 1997.  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.  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 March 31, 1997 totaled   $2,160,567, consisting of $2,066,000 in
borrowings and $94,567 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 and $474,784 in foreign letters of credit. 
The increase as of March 31, 1997 is the result of an increase in inventory due
to anticipated higher sales volume for the upcoming quarter. 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%.  The credit facility is subject to the
availability of qualifying receivables and inventories which serve as security
for the borrowings.  As of March 31, 1997 or June 30, 1996, there were no 
borrowings outstanding against this line of credit.  The due date for the line 
is October 31, 1997.






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<PAGE>   9


Pursuant to the Company's stock repurchase program, for the nine month period 
ended March 31, 1997, the Company purchased 51,629 shares of its common stock
at an average price of $6.83 per share.  All 51,629 shares were retired.  Since
the commencement of the Company's stock repurchase program, the Company has
purchased 343,576 shares of its common stock for a total of $2,125,014,
representing an average price of $6.18 per share.

For the nine month period ended March 31, 1997, the Company's Employee
Stock Ownership Plan and Trust ("ESOP") purchased 27,371 shares of the
Company's common stock for the ESOP at an average price of $8.38 per share. 
For the quarter ended March 31, 1997, the ESOP purchased 10,000 shares of the
Company's common stock for the ESOP at an average price of $11.18 per share.


Results of Operations

Net sales for the third quarter ended March 31, 1997 were $8,583,303 compared
to $8,482,620 for the same period in 1996.  Net sales for the nine months ended
March 31, 1997 were $31,766,272, up 14% compared with $27,941,603 during the
same nine months one year ago.  This increase was primarily a result of strong
orders throughout the period.

Gross profit as a percent of net sales was 34% for the quarter ended March 31,
1997 compared with 29% for the same period in the prior year.  For the nine
month period ended March 31, 1997, the gross profit percentage was 34% compared
with 30% for the same period in 1996.  Shifts in product mix resulted in the
increase in gross profit as compared to last year.

Selling, general and administrative expenses for the quarter ended March 31,
1997 were $2,169,313 or 25%, as against $2,160,599 or 25% for the same period
in 1996.  For the nine month period ended March 31, 1997, such expenses were
$6,660,273 or 21%, as against $6,529,139 or 23% for the same period in 1996.
The percentage decrease is a direct result of higher sales.

For the third quarter ended March 31, 1997, income from operations was $753,381
versus $303,880 for the same period in the prior year.  Income from operations
for the nine months ended March 31, 1997 was $4,094,214 as compared to
$1,962,033 for the same period in 1996.  The increase is primarily related to
higher sales and to the increase in gross margin resulting from shifts in
product mix.

Net interest expense amounted to $77,099 for the quarter as compared to $12,109
for the same period in the prior year.  For the nine month period, interest
expense amounted to $254,527 compared with $72,458 for the same period in the
prior year.  The increase is a result of the Company borrowing at much higher
levels as compared to the same periods last year.  The higher level of
borrowing was the result of increased inventory purchases to support the
increase in sales.







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<PAGE>   10


The Company recently agreed to an amendment and assignment of its License
Agreement with Trabelco N.V., covering North America, Central America, and 
South America, to Jiangsu Electronics Industries Limited, a subsidiary of
Orient Power Holdings Limited.  The assignment was effective as of March 31,
1997.  Orient Power has guaranteed Jiangsu's obligations under the License 
Agreement, as amended.   Orient Power is based in Hong Kong and has an extensive
portfolio of audio and video products. Pursuant to this assignment, Jiangsu has
agreed to make royalty payments through December 31, 2000, subject to certain 
minimum royalty amounts  due for the years 1998, 1999, and 2000. This license 
arrangement is subject to  renewal for additional 3 year periods. 

Royalty income earned in connection with this License Agreement for the quarter
ended March 31, 1997  was $212,244 as compared to $43,769 for the same period in
1996.  For the nine month period, royalty income was $908,619 compared to
$1,112,498 at March 31, 1996.  The Company recognizes royalty income when
earned.  The decrease in royalty income for the nine month period is the result
of lower sales volume by Trabelco N.V. in products covered under this License
Agreement.

The License Agreement with Trabelco N.V. covering many European countries
remains in place.  No sales have been reported under this License Agreement to
date; however, certain minimum royalties will be due for calendar years 1997
and 1998.  This License Agreement expires on December 31, 1998.  Trabelco N.V.
has the option to renew this License Agreement for additional 3 year periods.





   PART II  OTHER INFORMATION

   Item 6   (a)  Exhibits Filed
                  10.1 Third Amendment and Assignment of License Agreement
                  10.2 Consent of Directors (Supplemental Executive Retirement
                       Plan)
                    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.

















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<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:   5/14/97  /s/ Michael J. Koss
                 ----------------  ----------------------------
                                   Michael J. Koss, President,
                                   Chief Executive Officer,
                                   Chief Financial Officer

                 Dated:  5/14/97   /s/ Sue Sachdeva
                 ----------------  ----------------------------
                                   Sue Sachdeva
                                   Vice President -- Finance





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