One Stop Systems(US:OSS)2025-05-07 12:09Financial Performance - Total revenue for Q1 2025 was $12.26 million, a decrease of 3.1% from $12.65 million in Q1 2024[20] - Gross profit for Q1 2025 increased to $3.99 million, compared to $3.72 million in Q1 2024, reflecting a gross margin improvement[20] - Net loss for Q1 2025 was $2.02 million, compared to a net loss of $1.34 million in Q1 2024, indicating a worsening financial performance[20] - Operating expenses rose to $5.94 million in Q1 2025, up 19.2% from $4.99 million in Q1 2024, driven by increased spending in marketing and research[20] - The company reported a basic net loss per share of $0.09 for Q1 2025, compared to a loss of $0.06 per share in Q1 2024[20] - For the three months ended March 31, 2025, the net loss was $2,017,634, compared to a net loss of $1,339,622 for the same period in 2024, representing an increase in loss of approximately 50.5%[33] - The company reported stock-based compensation expense of $612,561 for Q1 2025, up from $408,740 in Q1 2024, indicating a 49.8% increase[33] - The operating lease expense for the three months ended March 31, 2025, was $204,889, compared to $174,415 for the same period in 2024[96] - The company reported a loss from operations of $1,944,860 for the three months ended March 31, 2025, compared to a loss of $1,262,014 in the same period of 2024[105] Cash and Assets - Cash and cash equivalents decreased to $6.50 million as of March 31, 2025, down from $6.79 million at the end of 2024[18] - Total assets increased slightly to $37.11 million as of March 31, 2025, compared to $36.93 million at the end of 2024[18] - Accounts receivable, net as of March 31, 2025, was $7,245,983, a decrease from $8,177,371 as of December 31, 2024[63] - Cash and cash equivalents at the end of the period were $6,498,468, down from $6,904,102 at the end of Q1 2024, reflecting a decrease of approximately 5.9%[33] - As of March 31, 2025, the company's short-term investments totaled $2,620,169, with cash alternatives at $268,288 and certificates of deposit at $2,351,881[58] - Total inventories, net as of March 31, 2025, amounted to $15,099,479, an increase from $13,176,156 as of December 31, 2024[66] - Accrued expenses and other liabilities decreased to $3,730,499 as of March 31, 2025, from $4,806,675 as of December 31, 2024[67] Liabilities and Deficits - Total liabilities rose to $11.06 million as of March 31, 2025, up from $9.76 million at the end of 2024, indicating increased financial obligations[18] - The company’s accumulated deficit grew to $24.07 million as of March 31, 2025, compared to $22.05 million at the end of 2024, reflecting ongoing financial challenges[18] - Accounts payable increased significantly to $4.48 million as of March 31, 2025, compared to $2.07 million at the end of 2024, suggesting potential cash flow issues[18] Market and Strategic Focus - The company is focusing on the development and sale of edge computing solutions, particularly targeting military and defense sectors[43] - Economic uncertainty and volatility, particularly in Europe and North America, are expected to impact the company's operations and customer spending[44][49] - The company plans to control costs, conserve cash, and strengthen margins through the introduction of new products focusing on AI compute capabilities[50] - The company experienced increased supplier pricing and supply chain disruptions, although these pressures have eased in recent quarters[46] - The company has made strategic acquisitions, including Bressner Technology GmbH, to enhance its market presence in Europe and the Middle East[42] - Management is closely monitoring the impacts of tariffs and trade policies on operations and supply chain[45] Revenue Sources and Customer Concentration - Revenue from customers with non-U.S. billing addresses represented approximately 63% of total revenue for the three months ended March 31, 2025, up from 59% in the same period of 2024[69] - The Company had one customer that accounted for approximately 17.2% of revenue for the three months ended March 31, 2025, compared to 16% in the same period of 2024[98] Stock and Compensation - The company's 2017 Equity Incentive Plan allows for the grant of up to 3,000,000 shares of common stock[78] - The Company increased the number of shares authorized for issuance under the 2017 Plan from 3,000,000 to 5,000,000 shares[79] - As of March 31, 2025, the Company had 965,688 stock options outstanding with a weighted average exercise price of $2.55 and an intrinsic value of $153,045[84] - The Company had 1,339,649 unvested restricted stock units (RSUs) as of March 31, 2025, with an average grant date fair value of $3.19[88] - As of March 31, 2025, there was $434,103 of unrecognized compensation cost related to unvested stock options, expected to be recognized over a weighted average period of 1.22 years[84] Other Financial Metrics - Cash flows from operating activities resulted in a net cash used of $1,135,596 for Q1 2025, a significant decrease from the net cash provided of $2,043,378 in Q1 2024[33] - Interest income decreased to $72,511 from $141,725 in the previous year, reflecting a decline of 48.9%[105] - Capital expenditures for the quarter were $12,793, down from $167,168 in the same period last year, indicating a reduction in investment[105] - The Company had $1,174,506 in total non-cancellable purchase orders as of March 31, 2025[97] - The company had no outstanding balance on its domestic revolving line of credit of $2,000,000 as of March 31, 2025[70] - As of March 31, 2025, the company had two term loans outstanding with an aggregate balance of €1,000,000 (approximately $1,079,484)[72] Subsequent Events and Market Risk - The company did not identify any subsequent events that would require recognition or disclosure in the financial statements[106] - There were no applicable quantitative and qualitative disclosures about market risk reported[181]