UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ________________ Commission File Number: 001-38371 One Stop Systems, Inc. (Exact Name of Registrant as Specified in its Charter) (State or other ju ...

Financial Data and Key Metrics - Revenue grew 28% YoY to a record $17.1 million in Q1 2022, with minimal seasonality impact (4% drop from Q4 to Q1 compared to 30%+ in prior years) [5] - Gross profit increased to $5.1 million from $4.4 million, with gross margins exceeding 30% [6] - Operating expenses increased by only 8% despite a 28% revenue growth, leading to improved operating leverage [6] - GAAP net income rose to $579,000, non-GAAP net income to nearly $1 million, and adjusted EBITDA to $1.4 million, all significant improvements over the previous year [6] - Cash and cash equivalents totaled $2.2 million, with short-term investments of $13.6 million, combining for $15.8 million as of March 31, 2022 [18] Business Line Performance - Core OSS revenue increased 23% YoY to $10.6 million, representing 62% of total revenue [12] - Bressner, the European subsidiary, saw a 37% revenue increase to $6.5 million, contributing 38% of total revenue [12] - Media and entertainment customer revenue exceeded pre-COVID levels, with expectations for continued growth throughout the year [5] - Autonomous trucking market saw four confirmed program wins in Q1, bringing the total to five, with products being shipped to three market leaders [10] Market Performance - The media and entertainment sector showed strong recovery, with revenues now greater than pre-COVID levels [5] - Bressner's performance in Europe was exceptional, with 37% revenue growth [6] - The AI transportable market, particularly in autonomous trucking, is accelerating, with significant interest in products like Rigel and Centauri [8][9] Strategic Direction and Industry Competition - The company is focusing on the AI transportable market, leveraging its technology to address high-growth verticals like autonomous trucks, military, and maritime applications [8][9] - Introduction of scalable standard products like Rigel and Centauri has been well-received, with Centauri specifically designed for autonomous trucking needs [9][10] - The company is investing in next-generation PCI Express Gen 5 technology, which will double the bandwidth of current Gen 4 products [23][24] Management Commentary on Operating Environment and Future Outlook - Supply chain disruptions, including long lead times, price increases, and higher shipping costs, continue to pose challenges, but the company is leveraging its strong cash position to mitigate these issues [7] - Management is optimistic about the growth potential in the AI transportable market, particularly in autonomous trucking, where the company has secured multiple program wins [10][29] - The company expects Q2 2022 revenue to be $17.3 million, representing 15% growth over Q2 2021 [38] Other Important Information - The company has a strong pipeline of pending major programs, with 34 opportunities, 20 of which involve AI transportable applications [19] - The company is actively participating in industry events and panels to position itself as a thought leader in the AI transportable market [26] - Management is focused on improving margins through price increases, manufacturing efficiencies, and the introduction of higher-value standard products [15] Q&A Session Summary Question: Performance of business segments outside media and entertainment and Bressner - All business segments are strong, with no decreases, but military shipments are expected to pick up in Q3 and Q4 [42] Question: Updates on military contracts - The company is working on several military projects, with additional shipments to Raytheon programs [44] Question: Pricing and differences in systems for autonomous trucks - The company is shipping to three customers with multiple products, and expects revenue from additional customers later this year [47] Question: Growth outlook for the media and entertainment customer - Steady growth is expected, driven by both virtual product lines and the return of large gatherings [49] Question: Margin improvement opportunities in media and entertainment - Margins in this segment are not expected to improve significantly, but the business remains profitable [53][56] Question: Integration opportunities with sensor platforms in autonomous vehicles - The company is already exploring deeper integration and potential partnerships in this area [58] Question: Replacement cycle for autonomous truck systems - Replacement cycles could be around three years, depending on technological advancements and application needs [59] Question: Development cycle for autonomous truck customers - The company is already shipping to three customers and expects to see revenue from additional customers later this year [63] Question: Contribution from autonomous trucking wins - Some autonomous trucking customers are expected to be in the top 10 by the end of 2022, with significant growth potential in 2023 and beyond [88] Question: Headcount growth plans - The company plans to add 2-3 employees per quarter, with flexibility to accelerate hiring if needed [92]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ________________ Commission File Number: 001-38371 One Stop Systems, Inc. (Exact Name of Registrant as Specified in its Charter) (State or other j ...

| --- | --- | --- | --- | --- | --- | |------------|----------------------------|-------|-------|-------|-------------------------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | April 2022 | OSS Corporate Presentation | | | | | | | | | | | | | | | | | | OneStopSystems.com NASDAQ:OSS | 1 Important Disclaimers & Cautions Regarding Forward-Looking Statements 2 One Stop Systems cautions you that statements in this presentation that are not a description of historical facts are forward-looking ...

One Stop Systems, Inc. (NASDAQ:OSS) Q4 2021 Earnings Conference Call March 24, 2022 5:00 PM ET Company Participants David Raun – President and Chief Executive Officer John Morrison – Chief Financial Officer Jim Ison – Chief Sales and Marketing Officer Conference Call Participants Scott Searle – Roth Capital Eric Martinuzzi – Lake Street Capital Joe Gomes – Noble Capital David Williams – Benchmark Brian Kinstlinger – Alliance Global Partners Operator Good afternoon and thank you for joining us today to discu ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 (Mark One) or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _______ Delaware 33-0885351 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 2235 Enterprise Street ...

One Stop Systems, Inc. (NASDAQ:OSS) Q3 2021 Earnings Conference Call November 11, 2021 5:00 PM ET Company Participants David Raun - President and CEO John Morrison - CFO Jim Ison - Chief Sales and Marketing Officer Conference Call Participants Eric Martinuzzi - Lake Street Joseph Gomes - Noble Capital Scott Searle - ROTH Capital Brian Kinstlinger - Alliance Global Partners David Williams - Benchmark Operator Good afternoon, and thank you for joining us today to discuss One Stop Systems' financial results fo ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part provides the company's unaudited consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flows, showing significant revenue growth and a shift to net income for the nine months ended September 30, 2021 Consolidated Balance Sheet Highlights (Unaudited) | Account | September 30, 2021 ($) | December 31, 2020 ($) | | :--- | :--- | :--- | | **Total Current Assets** | 39,780,385 | 24,078,516 | | **Total Assets** | 53,802,595 | 39,128,763 | | **Total Current Liabilities** | 11,595,366 | 7,812,223 | | **Total Liabilities** | 11,595,366 | 9,842,930 | | **Total Stockholders' Equity** | 42,207,229 | 29,285,833 | Consolidated Statements of Operations Highlights (Unaudited) | Metric | Q3 2021 ($) | Q3 2020 ($) | Nine Months 2021 ($) | Nine Months 2020 ($) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 15,984,293 | 12,976,058 | 44,205,054 | 37,961,023 | | **Gross Profit** | 5,516,703 | 4,901,613 | 14,602,231 | 11,622,496 | | **Income (Loss) from Operations** | 1,026,279 | 979,442 | 1,817,960 | (937,598) | | **Net Income (Loss)** | 980,696 | 857,790 | 2,719,016 | (250,404) | | **Diluted EPS** | 0.05 | 0.05 | 0.14 | (0.02) | Consolidated Statements of Cash Flows Highlights (Unaudited, Nine Months Ended) | Cash Flow Activity | September 30, 2021 ($) | September 30, 2020 ($) | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | 3,297,125 | (1,385,390) | | **Net cash used in investing activities** | (14,845,282) | (662,843) | | **Net cash provided by financing activities** | 9,228,588 | 2,325,509 | [Note 1 – The Company and Basis of Presentation](index=11&type=section&id=Note%201%20%E2%80%93%20The%20Company%20and%20Basis%20of%20Presentation) This note describes the company's industrial-grade computer system operations, corporate structure, and the significant impact of the COVID-19 pandemic on supply chains and component pricing - The company designs, manufactures, and markets industrial-grade computer systems for various applications, including media, medical, industrial, and military[30](index=30&type=chunk) - In March 2021, the company raised net proceeds of **$9,188,673** through a registered direct offering of its common stock[34](index=34&type=chunk) - The COVID-19 pandemic has caused increased pricing and shortages of necessary components, leading to longer lead times and increased inventory balances to ensure product availability[40](index=40&type=chunk)[43](index=43&type=chunk) [Note 8 – Debt](index=18&type=section&id=Note%208%20%E2%80%93%20Debt) This note details the company's debt structure, including foreign obligations, a Senior Secured Convertible Note, and the full forgiveness of its $1.5 million PPP loan in May 2021 - On May 3, 2021, the company received notification from the SBA that its Paycheck Protection Program (PPP) loan of **$1,499,360**, plus accrued interest of **$14,994**, had been fully forgiven[80](index=80&type=chunk) - The company has a Senior Secured Convertible Promissory Note with a principal face value of **$3,000,000**, issued in April 2020 with a **10%** original issue discount, maturing in April 2022[81](index=81&type=chunk)[82](index=82&type=chunk) Outstanding Debt Obligations as of September 30, 2021 | Loan Description | Balance ($) | Current Portion ($) | | :--- | :--- | :--- | | Convertible senior secured note | 2,590,909 | 2,590,909 | | Foreign (Uni Credit Bank AG) | 1,736,546 | 1,736,546 | | **Total** | **4,327,455** | **4,327,455** | [Note 9 – Stockholders' Equity](index=22&type=section&id=Note%209%20%E2%80%93%20Stockholders%27%20Equity) This note details stockholders' equity components, including stock-based compensation for options, RSUs, and warrants, totaling approximately $1.3 million for the nine months ended September 30, 2021 - As of September 30, 2021, there were **1,076,999** stock options outstanding with a weighted average exercise price of **$1.95**[98](index=98&type=chunk) - As of September 30, 2021, there was **$2,285,644** of unrecognized compensation cost related to **697,321** unvested restricted stock units (RSUs), expected to be recognized over a weighted average period of **1.87 years**[101](index=101&type=chunk) Stock-Based Compensation Expense | Period | 2021 | 2020 | | :--- | :--- | :--- | | **Three Months Ended Sep 30** | $399,148 | $210,280 | | **Nine Months Ended Sep 30** | $1,302,878 | $503,419 | [Note 10 – Commitments and Contingencies](index=25&type=section&id=Note%2010%20%E2%80%93%20Commitments%20and%20Contingencies) This note addresses legal matters, lease obligations, and significant customer concentration, including the resolution of a former CEO's legal dispute and one customer accounting for 60% of receivables - A legal action brought by former CEO Stephen D. Cooper was resolved, and the litigation was dismissed with prejudice on June 28, 2021[108](index=108&type=chunk)[110](index=110&type=chunk) - For the nine months ended September 30, 2021, two customers accounted for approximately **36%** of consolidated revenue[118](index=118&type=chunk) - As of September 30, 2021, one customer accounted for approximately **60%** of consolidated trade accounts receivable[119](index=119&type=chunk) [Note 13 – Revenue, Segment and Geographic Information](index=27&type=section&id=Note%2013%20%E2%80%93%20Revenue%2C%20Segment%20and%20Geographic%20Information) This note details segment performance, with OSS generating $27.0 million revenue (38.5% gross margin) and Bressner $17.2 million (24.4% gross margin) for the nine months ended September 30, 2021, with 62% of revenue from non-U.S. customers Segment Performance (Nine Months Ended September 30, 2021) | Segment | Revenues ($) | Gross Profit ($) | Gross Margin % | | :--- | :--- | :--- | :--- | | **OSS** | 26,968,202 | 10,395,769 | 38.5% | | **Bressner** | 17,236,852 | 4,206,462 | 24.4% | | **Total** | **44,205,054** | **14,602,231** | **33.0%** | - For the nine months ended September 30, 2021, revenue from customers with non-U.S. billing addresses represented approximately **62%** of the company's total revenue[125](index=125&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial performance for the three and nine months ended September 30, 2021, covering revenue growth, gross margin, operating expenses, and liquidity, including non-GAAP measures like Adjusted EBITDA and EPS [Results of Operations](index=33&type=section&id=Results%20of%20Operations) This subsection details financial results, with Q3 2021 revenue growing 23.2% to $16.0 million, driven by Bressner, while nine-month revenue increased 16.4% to $44.2 million with improved gross margin - Q3 2021 revenue increased **23.2%** year-over-year to **$16.0 million**, driven by a **$2.7 million (68.0%)** increase at Bressner and a **$0.3 million (3.2%)** increase at OSS[158](index=158&type=chunk) - Nine-month 2021 revenue increased **16.4%** year-over-year to **$44.2 million**, reflecting a general economic improvement and recovery from the COVID-19 pandemic's impact[159](index=159&type=chunk) - Consolidated gross margin for Q3 2021 decreased to **34.5%** from **37.8%** in Q3 2020, primarily due to changes in product mix at the OSS segment; however, the nine-month gross margin improved to **33.0%** from **30.6%** in the prior year[161](index=161&type=chunk)[164](index=164&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20capital%20resources) This subsection reviews liquidity, with $4.0 million cash, $14.5 million short-term investments, and $28.2 million working capital as of September 30, 2021, bolstered by a $9.2 million stock offering - As of September 30, 2021, the company had cash and cash equivalents of **$4.0 million**, short-term investments of **$14.5 million**, and working capital of **$28.2 million**[181](index=181&type=chunk) - Net cash provided by operating activities for the nine months ended September 30, 2021, was **$3.3 million**, a **$4.7 million** improvement compared to the **$1.4 million** used in the same period in 2020[190](index=190&type=chunk) - Financing activities provided **$9.2 million** in cash, primarily from a **$10.0 million** registered direct stock offering completed in March 2021[195](index=195&type=chunk) [Non-GAAP Financial Measures](index=41&type=section&id=Non-GAAP%20Financial%20Measures) This subsection presents non-GAAP metrics like Adjusted EBITDA ($4.3 million) and Non-GAAP diluted EPS ($0.15) for the nine months ended September 30, 2021, providing insight into core operating performance Adjusted EBITDA Reconciliation | Period | Q3 2021 ($) | Q3 2020 ($) | Nine Months 2021 ($) | Nine Months 2020 ($) | | :--- | :--- | :--- | :--- | :--- | | **Net Income (Loss)** | 980,696 | 857,790 | 2,719,016 | (250,404) | | **Adjusted EBITDA** | 1,811,899 | 1,566,649 | 4,262,897 | 682,147 | Non-GAAP Net Income and EPS | Metric | Q3 2021 ($) | Q3 2020 ($) | Nine Months 2021 ($) | Nine Months 2020 ($) | | :--- | :--- | :--- | :--- | :--- | | **Non-GAAP Net Income** | 1,543,744 | 1,239,055 | 2,999,241 | 773,050 | | **Non-GAAP Diluted EPS** | 0.08 | 0.07 | 0.15 | 0.05 | - Free cash flow for the nine months ended September 30, 2021, was **$3.0 million**, compared to a negative free cash flow of **$(2.0) million** in the same period of 2020[223](index=223&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks include interest rate exposure on variable debt, credit risk from receivables, and foreign currency fluctuations primarily from its German subsidiary Bressner's Euro transactions - The company is exposed to interest rate risk through its variable rate borrowings[207](index=207&type=chunk) - Credit risk is concentrated in cash, cash equivalents, and accounts receivable, with ongoing credit evaluations performed to mitigate this risk[208](index=208&type=chunk) - The company is subject to foreign currency risk as its German subsidiary, Bressner, largely transacts in Euros, with resulting translation adjustments recorded in other comprehensive income[209](index=209&type=chunk)[210](index=210&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[227](index=227&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended September 30, 2021[228](index=228&type=chunk) [PART II. OTHER INFORMATION](index=45&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, and details regarding unregistered sales of equity securities and use of proceeds [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 10, detailing the resolution and dismissal of a legal action filed by the company's former CEO in June 2021 - A legal action filed by former CEO Stephen D. Cooper against the company was resolved, and the court entered a dismissal with prejudice on June 28, 2021[110](index=110&type=chunk)[231](index=231&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) This section highlights ongoing business risks from the COVID-19 pandemic, including demand fluctuations, supply chain disruptions, and impacts on media, entertainment, and airline industries - The business continues to face negative effects from the COVID-19 pandemic, including impacts on customers, suppliers, and overall demand[233](index=233&type=chunk) - Demand from customers in the media, entertainment, and commercial airline industries has been particularly impacted by restrictions on public gatherings and reduced travel[236](index=236&type=chunk) - The pandemic raises the possibility of an extended global economic downturn, which could disrupt the supply chain and negatively affect revenues in future periods[237](index=237&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first nine months of 2021, the company issued common stock shares from warrant exercises, generating $107,500 in proceeds, without registration under the Securities Act of 1933 - During the nine months ended September 30, 2021, the company issued **54,834** shares of common stock from the exercise of warrants, generating total proceeds of **$107,500**[238](index=238&type=chunk)

| --- | --- | |----------------------------------------------|-------------------------------------------------------| | | | | Corporate Presentation N A S D A Q : O S S | September 2021 AI Transportable Solutions on the Edge | Important Disclaimers & Cautions Regarding Forward-Looking Statements 2 One Stop Systems cautions you that statements in this presentation that are not a description of historical facts are forward-looking statements. These statements are based on the company's current beliefs and ex ...

Financial Data and Key Metrics Changes - One Stop Systems achieved record revenues for the first half of 2021, with Q2 revenue of $14.9 million, an increase of 12% from Q1 and up 28% year-over-year [4][9] - Net income increased to $1.7 million in Q2 2021, compared to a net loss of $12,000 in the same quarter last year [13] - Adjusted EBITDA reached $1.4 million, representing 9% of quarterly revenue, compared to $73,000 in the same year-ago quarter [14] Business Line Data and Key Metrics Changes - The core OSS business revenue increased by 25% to $9.1 million compared to $7.3 million in the same year-ago quarter [10] - Bressner, the European subsidiary, saw a revenue increase of 34%, contributing $5.8 million in Q2 compared to $4.3 million in the same period last year [10] - Gross margin for the core OSS business improved to 36.7%, up 2.4 percentage points year-over-year [11] Market Data and Key Metrics Changes - Revenue growth was driven by sales of ruggedized servers into the media and entertainment markets and military AI transportable products [9] - The company reported a notable increase in product orders from media and entertainment customers, particularly for new virtual products [10] Company Strategy and Development Direction - The company aims to strengthen its position in the edge computing industry and become a market leader in the AI transportable space [5] - A focus on diversifying the customer base and expanding into military applications is evident, with a significant portion of the pipeline now targeting AI transportable markets [44] Management's Comments on Operating Environment and Future Outlook - Management noted that while the pandemic's effects will continue, there is improving customer demand, particularly from commercial aerospace clients [25][26] - The company anticipates revenue guidance of $15.9 million for Q3, representing 8% growth over Q2 and 23% growth year-over-year [28] Other Important Information - The company has seen a tripling of shareholder value over the past two years, attributed to strategic execution and improved board composition [6] - Cash and cash equivalents totaled $4 million, with short-term investments of $14.5 million, down from $19.6 million as of March 31, 2021 [19] Q&A Session Summary Question: Impact of global supply chain issues on gross margins - Management acknowledged supply issues but emphasized that demand reflects real market needs, and they are focused on efficiency to offset price increases [32][33] Question: Operating expenses outlook - Operating expenses are expected to increase slightly due to trade shows and hiring, but management is cautious about significant increases [35] Question: RFP pipeline and end market dynamics - The pipeline includes 17 major pending opportunities, with a focus on higher-margin AI transportable markets [36][38] Question: Sustainability of entertainment vertical revenue - Management expressed confidence in the sustainability of revenue from virtual products, anticipating a stronger customer base in 2022 [40] Question: Revenue concentration from major customers - Both major customers have returned strong, but the company is diversifying its customer base and participating in more programs [42][43] Question: Staffing challenges - The company is adequately staffed but noted challenges in finding new talent due to geographic dynamics [55] Question: Design cycle for major customer wins - The design cycle for commercial customers typically takes 6 to 12 months, while military projects can take 12 to 24 months [57]