One Stop Systems(US:OSS)2021-05-13 20:05Revenue and Profitability - Revenue for the three months ended March 31, 2021, was $13,315,752, a slight decrease from $13,359,637 in the same period of 2020[154] - Net income for Q1 2021 was $41,198, a recovery from a net loss of $1,096,032 in Q1 2020[154] - Total revenue for the three months ended March 31, 2021, decreased by $43,885 or 0.33% compared to the same period in 2020, with OSS revenue increasing by $161,747 or 1.21 percentage points, while Bressner's revenue decreased by $205,632 or 1.54 percentage points[157] - The adjusted EBITDA for the three months ended March 31, 2021, was $1,065,574, a significant improvement from the adjusted EBITDA of $(957,076) in the same period of 2020[202] - The Company reported a net income of $41,198 for the three months ended March 31, 2021, compared to a net loss of $(1,096,032) in the same period of 2020[202] - Non-GAAP net income for the three months ended March 31, 2021, was $643,492, compared to a loss of $(713,746) in the same period of 2020[205] Cost Management - Cost of revenue decreased to $8,882,968 in Q1 2021 from $9,963,950 in Q1 2020, resulting in a gross profit increase to $4,432,784, compared to $3,395,687 in Q1 2020[154] - Gross margin improved to 33.3% in Q1 2021 from 25.4% in Q1 2020, reflecting better cost management and operational efficiency[156] - Cost of revenue decreased by $1,080,982 or 10.8% for the three months ended March 31, 2021, primarily due to reduced sales in the media and entertainment industry[158] - General and administrative expenses decreased by $356,446 or 14.2%, resulting in a decrease as a percentage of revenue to 16.2% in Q1 2021 from 18.8% in Q1 2020[161] - Research and development expenses decreased by $371,192 or 30.8%, with total R&D expense as a percentage of revenue decreasing to 6.2% in Q1 2021 from 9.0% in Q1 2020[163] Cash Flow and Liquidity - The company generated $4,291,066 in cash from operating activities in Q1 2021, an increase of $5,012,839 compared to cash used in Q1 2020[178] - Cash and cash equivalents as of March 31, 2021, were $19,614,315, with working capital of $22,935,632[170] - The company anticipates using liquidity and cash flows to fund ongoing operations, R&D projects, and potential acquisitions over the next year[171] - The Company had $19,614,315 in cash and cash equivalents as of March 31, 2021, compared to $6,316,921 as of December 31, 2020, indicating a significant increase in liquidity[194] Financing Activities - The company completed a $6.0 million debt financing in April 2020, with a non-interest bearing convertible note[142] - The company raised approximately $9.2 million in a registered direct offering in March 2021, selling 1,497,006 shares at $6.68 per share[143] - The Company generated $9,173,593 in cash from financing activities for the three months ended March 31, 2021, compared to cash used of $1,214,119 in the same period of 2020[183] - The Company experienced net cash provided by financing activities of $9,173,593 in Q1 2021, compared to net cash used of $1,214,119 in Q1 2020[177] - The Company received proceeds of $278,968 from the exercise of warrants and stock options during the three months ended March 31, 2021, up from $57,000 in the same period of 2020[184] - The Company entered into a Securities Purchase Agreement on March 1, 2021, issuing 1,497,006 shares at an offering price of $6.68 per share, resulting in net proceeds of approximately $9.22 million[185] Challenges and Strategic Actions - The company implemented a cost reduction plan in April 2020, estimated to save approximately $2.5 million annually[141] - The acquisition of Bressner Technology GmbH expanded the company's product lines and market reach in Europe[133] - The company continues to face challenges due to COVID-19, impacting demand and operational capabilities[136] Taxation - The company recorded an income tax provision of $60,522 for Q1 2021, with an effective tax rate of 76.4% compared to 28.2% in Q1 2020[168] Shareholder Information - The weighted average common shares outstanding increased to 17,348,164 for basic shares in Q1 2021, up from 16,332,898 in Q1 2020[205] - The Company does not have any off-balance sheet financing arrangements or liabilities, ensuring a straightforward financial position[186]