Core Insights - One Stop Systems, Inc. (NASDAQ: OSS) is a relatively small company that has not garnered much attention, yet its business fortunes have changed rapidly [1] Company Overview - The company operates in the technology, infrastructure, and internet services sectors, focusing on strong fundamentals and real potential for growth [1] Analyst Background - The analyst has a background in petroleum and gas engineering and has transitioned into finance, emphasizing the importance of understanding business growth and market reactions [1]

Core Insights - One Stop Systems, Inc. (OSS) has secured an initial order valued at approximately $1.5 million from a Canadian integrator for the commercial aerospace industry, with an expected three-year revenue pipeline of around $6 million [1][2]. Group 1: Contract Details - The contract involves the provision of embedded Cabin Services Systems (CSS), which includes 2,000 PAX Lighting Control Units (PLCU) and 63 Column Integration Controller Units (CICU) [2]. - Both PLCU and CICU are DO-160 qualified, ensuring they meet rigorous environmental testing standards for airborne equipment [2]. Group 2: Strategic Importance - Expanding into the commercial aerospace sector is a key component of OSS's long-term growth strategy, highlighting the company's commitment to establishing a presence in rugged compute and control architectures [3]. - The engagement reflects OSS's ongoing partnerships with leading aerospace primes and the demand for DO-160 qualified hardware [3]. Group 3: Product and Market Position - OSS specializes in AI-enabled solutions for edge computing, designing and manufacturing ruggedized servers, compute accelerators, and storage products for various industries, including aerospace [4][5]. - The company addresses the entire AI workflow, from data acquisition to deep learning, and is positioned in the rapidly growing edge computing market [6].

Core Insights - One Stop Systems, Inc. (OSS) will showcase its advanced integrated technologies at the 2025 AUSA Annual Meeting & Exposition, emphasizing low latency and powerful performance for rugged edge computing [1][2][3] Company Overview - OSS is a leading provider of rugged, enterprise-class compute solutions designed for artificial intelligence (AI), machine learning (ML), and sensor processing in challenging environments [1][5] - The company specializes in high-performance servers, storage systems, and embedded platforms that meet the demands of deployed environments [2][6] Product Highlights - At AUSA, OSS will introduce a new portfolio of products that leverage commercial data center advantages, compliant with MOSA and SOSA standards, aiming to set a new benchmark for defense-grade compute solutions [2][3] - OSS products include ruggedized servers, compute accelerators, and storage solutions, which are utilized across various industries, including defense, autonomous trucking, and agriculture [6][7] Strategic Focus - The company aims to bring data center capabilities directly to the battlefield, enhancing mission agility and decision-making for next-generation Army programs [3][5] - OSS solutions address the entire AI workflow, from data acquisition to deep learning and inference, positioning the company as a key player in the rapidly growing edge computing market [7]

Core Viewpoint - One Stop Systems, Inc. has successfully closed a registered direct offering, raising approximately $12.5 million through the sale of 2,500,000 shares at $5.00 per share, aimed at supporting growth and enhancing financial flexibility [1][2][3] Group 1: Financial Details - The offering resulted in gross proceeds of approximately $12.5 million before deducting placement agent commissions and other expenses [1] - The company plans to utilize the net proceeds for growth strategy advancement, working capital, and business acceleration, focusing on mergers and acquisitions [3] Group 2: Company Overview - One Stop Systems, Inc. specializes in rugged Enterprise Class compute solutions for AI, machine learning, and sensor processing at the edge [1][6] - The company designs and manufactures products that enable rugged AI and autonomous capabilities across various industries, including defense, autonomous trucking, and farming [6][7] Group 3: Market Position and Strategy - The company entered the second half of the year with strong momentum and is well-positioned to pursue opportunities that will accelerate growth and extend its leadership in enterprise-class compute [2] - OSS solutions address the entire AI workflow, from data acquisition to deep learning and inference, delivering industry firsts for industrial OEM and government customers [8]

Core Insights - One Stop Systems, Inc. has entered into securities purchase agreements for the sale of 2,500,000 shares of common stock at a price of $5.00 per share, resulting in gross proceeds of approximately $12.5 million [1][2] - The company plans to utilize the net proceeds for growth strategy advancement, working capital to support expected sales growth, and business acceleration, focusing on mergers and acquisitions and overall expansion [2] Offering Details - The offering is conducted under an effective shelf registration statement on Form S-3, declared effective by the SEC on August 25, 2023 [3] - A.G.P./Alliance Global Partners is the lead placement agent, with Roth Capital Partners acting as the joint-placement agent [2] Company Overview - One Stop Systems, Inc. specializes in AI-enabled solutions for rugged environments, designing and manufacturing Enterprise Class compute and storage products [5] - The company's products include ruggedized servers, compute accelerators, flash storage arrays, and storage acceleration software, utilized across various industries such as autonomous trucking, farming, and defense [6] Technology and Applications - OSS solutions address the entire AI workflow, from data acquisition to deep learning and large-scale inference, delivering industry firsts for industrial OEM and government customers [7]

Core Insights - One Stop Systems, Inc. (OSS) has secured a new contract valued at approximately $500,000 from Safran Federal Systems, with expected follow-on production orders exceeding $3 million over the next five years [1][2]. Group 1: Contract Details - The contract involves the provision of 4U, short-depth servers engineered for military applications on naval vessels and aircraft, leveraging OSS's expertise in PCIe/Switch Fabric technology and rugged system design [2]. - OSS anticipates that this contract will contribute more than $3 million in cumulative sales over the next five years [2]. Group 2: Strategic Relationship - The contract marks the establishment of a new relationship with Safran, which OSS views as an opportunity for a broader strategic partnership, with ongoing collaboration with additional business units [3]. - The company aims to deepen its relationship with Safran and expand the presence of OSS products in both domestic and international aerospace and defense markets [3]. Group 3: Company Overview - OSS is recognized as a leader in AI-enabled solutions for edge computing, designing and manufacturing rugged enterprise-class compute and storage products [4]. - The company's products include ruggedized servers, compute accelerators, and flash storage arrays, utilized across various industries, including defense, autonomous trucking, and farming [5]. - OSS solutions address the entire AI workflow, delivering high performance in challenging environments, and are positioned within the rapidly growing edge computing market [6].

Company Overview - One Stop Systems, Inc. (OSS) is a leader in AI-enabled solutions for edge computing, providing rugged, enterprise-class compute and storage products [2][4] - The company designs and manufactures products that support AI, sensor fusion, and autonomous capabilities in challenging environments [2][4] Product Offerings - OSS products include ruggedized servers, compute accelerators, flash storage arrays, and storage acceleration software, utilized across various industries such as autonomous trucking, farming, and defense [3][4] - The solutions address the entire AI workflow, from data acquisition to deep learning and large-scale inference, delivering high performance in demanding conditions [4] Market Position - OSS operates in the rapidly growing segment of the multi-billion-dollar edge computing market, focusing on AI-enabled solutions that require high performance [4] - The company has achieved many industry firsts for industrial OEM and government customers, highlighting its innovative capabilities [4] Upcoming Events - OSS will participate in the H.C. Wainwright 27th Annual Global Investment Conference from September 8-10, 2025, at the Lotte New York Palace Hotel, and the Lake Street Capital Markets 9th Annual Best Ideas Growth BIG9 Conference on September 11, 2025, at The Yale Club [6]

Core Insights - Maris-Tech Ltd. has entered into a Product Supply Agreement with One Stop Systems, Inc. to enhance its presence in the U.S. defense market [1][2][3] - The collaboration aims to provide OSS customers with advanced video and AI-based edge computing solutions for defense applications [2][3][4] - This partnership is part of Maris-Tech's broader strategy to expand its international sales network through regional collaborations [3][4] Company Overview - Maris-Tech is a leader in video and AI-based edge computing technology, focusing on intelligent video transmission solutions [5] - The company offers lightweight, low-power products that excel in raw data processing, image processing, and AI-driven analytics [5] - Maris-Tech serves various industries, including defense, aerospace, and homeland security, and is committed to innovation in mission-critical applications [5] Partner Overview - One Stop Systems, Inc. specializes in rugged AI-enabled solutions for edge computing, providing high-performance products for challenging environments [6] - OSS's offerings include ruggedized servers, AI accelerators, and storage solutions designed for mission-critical applications across multiple industries [6] - The collaboration with Maris-Tech allows OSS to enhance its product suite for U.S. defense customers, addressing evolving mission requirements [4][6]

Financial Data and Key Metrics Changes - The company reported consolidated revenue of $14.1 million for Q2 2025, a 6.9% increase from $13.2 million in the same quarter last year [14][15] - Consolidated gross margin expanded to 31.3% in Q2 2025 from 25.2% in the prior year quarter, while the OSS segment margin improved to 41.3% from 24.9% [15][16] - The company expects full-year revenue of approximately $59 million to $61 million for 2025, representing over 20% year-over-year growth for the OSS segment [13][19] Business Line Data and Key Metrics Changes - The OSS segment generated bookings totaling $25.4 million in the first half of the year, with a book-to-bill ratio of 2.3 [4] - The Bresner segment is expected to achieve higher sales and profitability in 2025 compared to last year's results, with recent bookings aligning with targets [7] - The OSS segment's gross margin is expected to be in the 40% range for the full year 2025, up from prior guidance of mid to upper 30s [16][19] Market Data and Key Metrics Changes - The company is seeing signs of stabilization in European markets served by the Bresner operating unit, with recent bookings and revenue in line with targets [7] - The market for composable infrastructure is projected to grow significantly, from $5.87 billion in 2024 to $28.44 billion by 2031 [9] Company Strategy and Development Direction - The company is focused on leveraging high-performance edge compute solutions to meet growing demands in AI, machine learning, and sensor fusion [2] - A multi-year strategic plan has been launched to rebuild the go-to-market approach and expand the sales pipeline [2][3] - The introduction of the Ponto platform aims to address the growing composable infrastructure market and enhance the company's position in commercial data centers [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on multi-year growth opportunities driven by AI and machine learning [7] - The company anticipates further commercial and defense announcements in the coming months, supported by strong demand for enterprise-class compute solutions [6] - Management remains cautious about the Bresner segment's growth outlook while optimistic about the OSS segment's potential [25][26] Other Important Information - The company has recognized lifetime contracted revenue of over $50 million on the PA platform, with expectations of approximately $4 million in cumulative sales between 2026 and 2029 [5][6] - R&D investments have been increased in 2025 to capitalize on emerging opportunities [8] Q&A Session Summary Question: What is the outlook for the Bresner segment? - Management noted that the Bresner segment is expected to perform well, with market recovery in Europe providing opportunities for growth [24][25] Question: How does the company view the data center market and AI partnerships? - The company is adjusting product lines to meet the demand for higher wattage GPUs and is actively engaging with AI software vendors for partnerships [28][31] Question: What is the expected growth rate for OSS and Bresner segments in 2026? - The OSS segment is expected to grow at about 20% to 25% annually, while the Bresner segment is modeled for growth in the range of 7% to 9% [41] Question: How is the company managing supply chain challenges? - Management indicated that they are working closely with suppliers to mitigate lead time risks and ensure production ramp-up in the second half of the year [34] Question: What is the current status of government and commercial bookings? - The company reported a stronger mix of defense bookings in the first half of the year, with expectations for continued alignment with bid and proposal activities [53][54]

[Forward-Looking Statements](index=2&type=section&id=FORWARD-LOOKING_STATEMENTS) This section outlines forward-looking statements, emphasizing inherent risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are identified by words like 'anticipate,' 'believe,' 'expect,' 'intend,' 'may,' 'plan,' 'project,' 'will,' and similar expressions[7](index=7&type=chunk) - Key risks include **economic uncertainty**, **geopolitical instability**, **volatile market conditions**, ability to raise capital, achieving profitability, dependence on third-party manufacturers, and retaining key personnel[8](index=8&type=chunk)[12](index=12&type=chunk) - Readers are cautioned not to place undue reliance on these statements, as actual results may vary materially due to competitive and rapidly changing environments and unforeseen risks[9](index=9&type=chunk) PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flows [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets show increased total assets and liabilities, with a slight decrease in stockholders' equity from December 2024 to June 2025 | Metric | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------- | :-------------- | :---------------- | :----- | | Cash and cash equivalents | $8,458,920 | $6,794,093 | +24.5% | | Short-term investments | $1,030,416 | $3,217,065 | -68.0% | | Accounts receivable, net | $7,112,660 | $8,177,371 | -13.1% | | Inventories, net | $14,599,319 | $13,176,156 | +10.8% | | Total current assets | $32,418,870 | $32,201,048 | +0.7% | | Operating lease right-of-use assets | $3,986,046 | $1,536,094 | +159.5% | | Total Assets | $39,375,818 | $36,933,982 | +6.6% | | Accounts payable | $4,097,309 | $2,068,017 | +98.1% | | Accrued expenses and other liabilities | $3,516,054 | $4,806,675 | -26.8% | | Current portion of operating lease obligation | $457,302 | $285,937 | +59.9% | | Total current liabilities | $9,247,729 | $8,195,679 | +12.8% | | Operating lease obligation, net of current portion | $3,846,257 | $1,513,684 | +154.1% | | Total liabilities | $13,171,548 | $9,761,937 | +35.0% | | Total stockholders' equity | $26,204,271 | $27,172,045 | -3.4% | [Unaudited Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenue increased 6.9% with improved gross profit, reducing net loss; H1 2025 revenue grew 2.0% but net loss widened | Metric | Q2 2025 | Q2 2024 | YoY Change (Q2) | H1 2025 | H1 2024 | YoY Change (H1) | | :-------------------------- | :-------------- | :-------------- | :-------------- | :-------------- | :-------------- | :-------------- | | Revenue | $14,108,585 | $13,201,330 | +6.9% | $26,367,672 | $25,853,116 | +2.0% | | Cost of revenue | $9,696,307 | $9,868,067 | -1.7% | $17,958,403 | $18,796,560 | -4.5% | | Gross profit | $4,412,278 | $3,333,263 | +32.4% | $8,409,269 | $7,056,556 | +19.2% | | Total operating expenses | $6,236,231 | $5,588,128 | +11.6% | $12,178,082 | $10,573,435 | +15.2% | | Loss from operations | $(1,823,953) | $(2,254,865) | -19.1% | $(3,768,813) | $(3,516,879) | +7.2% | | Net loss | $(2,020,730) | $(2,344,545) | -13.8% | $(4,038,364) | $(3,684,167) | +9.6% | | Basic EPS | $(0.09) | $(0.11) | -18.2% | $(0.19) | $(0.18) | +5.6% | | Diluted EPS | $(0.09) | $(0.11) | -18.2% | $(0.19) | $(0.18) | +5.6% | [Unaudited Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive loss for Q2 2025 decreased significantly to $0.93 million, and for H1 2025 to $2.79 million, driven by currency translation adjustments | Metric | Q2 2025 | Q2 2024 | YoY Change (Q2) | H1 2025 | H1 2024 | YoY Change (H1) | | :--------------------------------- | :-------------- | :-------------- | :-------------- | :-------------- | :-------------- | :-------------- | | Net loss | $(2,020,730) | $(2,344,545) | -13.8% | $(4,038,364) | $(3,684,167) | +9.6% | | Currency translation adjustment | $1,094,358 | $(24,537) | N/A | $1,247,298 | $(180,824) | N/A | | Total other comprehensive income (loss) | $1,091,618 | $(26,740) | N/A | $1,244,952 | $(188,234) | N/A | | Comprehensive loss | $(929,112) | $(2,371,285) | -60.8% | $(2,793,412) | $(3,872,401) | -27.8% | [Unaudited Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity decreased from $27.17 million to $26.20 million, driven by net loss, partially offset by stock-based compensation and currency adjustments | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Balance, January 1 | $27,172,045 | $39,582,322 | | Stock-based compensation | $1,128,335 | $965,938 | | Exercise of stock options, RSUs and warrants | $1,000,780 | $219,348 | | Taxes paid on net issuance of employee stock options | $(303,477) | $(349,296) | | Currency translation adjustment | $1,247,298 | $(180,824) | | Net unrealized gain (loss) on short-term investments | $(2,346) | $(7,410) | | Net loss | $(4,038,364) | $(3,684,167) | | Balance, June 30 | $26,204,271 | $36,545,909 | [Unaudited Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 operating activities used $1.50 million cash, a shift from prior year; investing provided $2.01 million, and financing provided $0.70 million | Cash Flow Activity | H1 2025 | H1 2024 | YoY Change | | :-------------------------------------- | :-------------- | :-------------- | :--------- | | Net cash (used in) provided by operating activities | $(1,504,300) | $1,226,742 | -222.7% | | Net cash provided by investing activities | $2,010,973 | $2,541,086 | -20.9% | | Net cash provided by (used in) financing activities | $697,303 | $(1,014,840) | N/A | | Net change in cash and cash equivalents | $1,203,976 | $2,752,988 | -56.3% | | Cash and cash equivalents, end of period | $8