One Stop Systems(OSS) - 2025 Q2 - Quarterly Report

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] - 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][12] - 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] PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flows Consolidated Balance Sheets 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 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 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 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 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