One Stop Systems(OSS) - 2025 Q3 - Quarterly Report

Financial Performance - Total revenue for Q3 2025 was $18,756,199, a 37.4% increase from $13,701,097 in Q3 2024[21] - Product revenue reached $18,460,660 in Q3 2025, up from $12,682,241 in Q3 2024, representing a 45.5% growth[21] - Gross profit for Q3 2025 was $6,692,372, compared to a gross loss of $1,717,738 in Q3 2024[21] - Net income for Q3 2025 was $263,487, a significant improvement from a net loss of $6,815,384 in Q3 2024[21] - The company reported a comprehensive loss of $124,851 for Q3 2025, compared to a comprehensive loss of $6,324,750 in Q3 2024[23] - The net loss for the nine months ended September 30, 2025, was $3,774,876, compared to a net loss of $10,499,551 for the same period in 2024, indicating a significant improvement[34] - Basic net loss per share for the three months ended September 30, 2025, was $0.01, compared to a loss of $0.32 in the same period of 2024[103] Assets and Liabilities - Total assets increased to $43,057,960 as of September 30, 2025, up from $36,933,982 at the end of 2024, reflecting a growth of 16.5%[19] - Current liabilities rose to $12,865,500 as of September 30, 2025, compared to $8,195,679 at the end of 2024, an increase of 57.5%[19] - Cash and cash equivalents decreased to $6,508,020 as of September 30, 2025, down from $6,794,093 at the end of 2024[19] - The company’s accumulated deficit increased to $(25,827,938) as of September 30, 2025, compared to $(22,053,061) at the end of 2024[19] - As of September 30, 2025, the total stockholders' equity was $26,339,748, reflecting an increase from $26,204,271 on June 30, 2025[27] Operating Expenses - Operating expenses for Q3 2025 totaled $6,122,270, up from $5,016,289 in Q3 2024, indicating a 22.1% increase[21] - The company reported a loss from operations of $570,102 for the three months ended September 30, 2025, compared to a loss of $6,734,027 in the same period of 2024[108] - Research and development expenses for the three months ended September 30, 2025, were $1,448,521, compared to $950,373 in 2024, representing a 52.5% increase[108] Cash Flow - The company reported net cash used in operating activities of $4,925,615 for the nine months ended September 30, 2025, compared to net cash provided by operating activities of $2,143,545 in 2024[34] - Cash and cash equivalents at the end of the period were $6,508,020, down from $9,402,608 at the end of September 2024[34] Stock and Equity - The balance of common stock increased from 21,920,779 shares on June 30, 2025, to 22,008,583 shares on September 30, 2025[27] - The Company has authorized the issuance of up to 50,000,000 shares of common stock and 10,000,000 shares of preferred stock[76] - As of September 30, 2025, there were 621,539 stock options outstanding with a weighted average exercise price of $2.80[85] - The intrinsic value of options exercised during the nine months ended September 30, 2025, was $528,143[86] - The Company granted 653,539 restricted stock units (RSUs) during the nine months ended September 30, 2025, with an average grant date fair value of $3.83[89] - Unrecognized compensation cost related to unvested RSUs as of September 30, 2025, was $2,987,924, expected to be recognized over 0.98 years[89] - Stock-based compensation expense for the nine months ended September 30, 2025, totaled $1,572,956, compared to $1,423,949 for the same period in 2024[90] Debt and Financing - As of September 30, 2025, Bressner had total outstanding debt obligations of €1,000,000 (US $1,173,116) with two term loans[75] - The interest rate on the note payable with Commerzbank AG was reduced to 3.50% with a maturity date extended to March 31, 2026[75] - The outstanding balance on the note with UniCredit Bank remained at €500,000 (US $586,558) as of September 30, 2025[75] - The balance outstanding on the domestic revolving line of credit was $1,000,000 as of September 30, 2025, with an interest rate of 7.25%[72] Market and Economic Conditions - Economic conditions in Europe have improved in 2025, but uncertainty and recession risks remain[45] - The company is closely monitoring the impacts of tariffs and supply chain disruptions on its operations[46] - The company may postpone or abandon planned investments in response to economic changes, impacting customer attraction and innovation rates[50] Customer and Revenue Concentration - Revenue from customers with non-U.S. billing addresses represented approximately 53% of the company's revenue for the three-month period ended September 30, 2025[71] - Customer concentration increased, with two customers accounting for approximately 37.2% of revenue for the three months ended September 30, 2025, compared to 13.6% in 2024[100] Inventory and Accounts Receivable - As of September 30, 2025, accounts receivable net amounted to $12,024,553, an increase from $8,177,371 as of December 31, 2024[65] - The company's inventories net totaled $15,326,919 as of September 30, 2025, compared to $13,176,156 as of December 31, 2024[68] - The provision for credit losses related to accounts receivable was $43,496 for the three-month period ended September 30, 2025, compared to $40,000 for the same period in 2024[66] - The company experienced a decrease in accounts receivable by $3,334,841 for the nine months ended September 30, 2025, compared to a decrease of $1,003,287 in 2024[34] Lease and Purchase Obligations - The Company has extended its lease in San Diego County, which now expires in August 2030[95] - Operating lease expense for the three months ended September 30, 2025, was $312,521, compared to $206,462 for the same period in 2024, representing a 51.3% increase[97] - Total lease payments as of September 30, 2025, amounted to $5,728,707, with a present value of lease payments at $4,326,024 after accounting for interest[98] - The company had non-cancellable purchase orders totaling $3,110,328 as of September 30, 2025[99] Securities Offering - The Company entered into a Securities Purchase Agreement with institutional investors to issue 2,500,000 shares of Common Stock[111] - The Common Stock was sold at a par value of $0.0001 per share[111] - The Offering generated aggregate gross proceeds of $12,500,000 before deducting fees and expenses[111] - The Offering closed on October 1, 2025[111] - The prospectus supplement for the Offering was filed on October 1, 2025[111] - The Registration Statement on Form S-3 was originally filed on August 18, 2023, and declared effective on August 25, 2023[111]