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OSS, One Stop Systems Inc.

Technology Hardware consumer brand Distress / turnaroundNet current asset value

One Stop Systems Inc. designs, manufactures, and markets specialized enterprise class high-performance compute, high speed switch fabrics, and storage hardware and software, which are designed to target edge applications for AI/ML, sensor processing, sensor fusion, and autonomy.

Edge computing is a form of computing that is done on platform or on site, connected with the data source or the user, rather than in the cloud, minimizing the need for data to be processed remotely.

To meet the demands at the edge, we offer specialized products and system solutions that consist of computers, switch fabrics, and storage products that incorporate the latest state-of-the art components with embedded proprietary software.

Latest annual: FY2025 10-K

OSS · One Stop Systems Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$32M

+31.2% YoY · −9% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $35M 5-yr avg $50M

Gross margin 51% 5-yr avg 28%

Operating margin −4.8% 5-yr avg −16.5%

ROIC −6% 5-yr avg −18%

Owner-earnings margin −3% 5-yr avg −5%

Free cash flow margin −3% 5-yr avg −5%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock. Net current asset value. Current assets alone exceed every liability combined, and the surplus is most of the balance sheet: the shape Graham called a net-net.
What moves the needle: Operating margin has run around −1.6% through the cycle on a 31% gross margin, the operating line deeply negative — so the lever is the path to a margin at all: revenue growth against the cost curve and the cash runway, not the level of a margin that isn't there yet. Inventory runs near 19% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −5%, above 15% in 0 of 9 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2017–2025

realized figures from each filing · older years to the left

2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
										Income statement
$28M	$37M	$58M	$52M	$62M	$72M	$61M	$25M	$32M	$35M	RevenueRevenue
31%	31%	33%	32%	32%	28%	29%	3%	50%	51%	Gross marginGross mgn
13%	18%	15%	16%	12%	10%	15%	29%	23%	23%	SG&A / revenueSG&A/rev
10%	11%	8%	8%	7%	7%	7%	14%	17%	14%	R&D / revenueR&D/rev
($450K)	($3M)	($779K)	($424K)	$2M	$2M	($8M)	($16M)	($3M)	($2M)	Operating incomeOp. inc.
−1.6%	−8.6%	−1.3%	−0.8%	2.8%	2.2%	−13.0%	−63.8%	−10.5%	−4.8%	Operating marginOp. mgn
$97K	($1M)	($900K)	($7K)	$2M	($2M)	($7M)	($14M)	$5M	$7M	Net incomeNet inc.
—	—	—	—	21%	—	—	—	0%	0%	Effective tax rateTax rate
										Cash flow & returns
($382K)	($4M)	$2M	($250K)	$6M	($8M)	($440K)	($108K)	($7M)	($1M)	Operating cash flowOp. cash
$836K	$1M	$671K	$923K	$924K	$987K	$1M	$927K	$772K	$761K	DepreciationDeprec.
($1M)	($5M)	$2M	($2M)	$671K	($9M)	$3M	$11M	($14M)	($10M)	Working capital & otherWC & other
$425K	$623K	$2M	$820K	$564K	$530K	$822K	$228K	$115K	$123K	CapexCapex
1.5%	1.7%	4.1%	1.6%	0.9%	0.7%	1.3%	0.9%	0.4%	0.4%	Capex / revenueCapex/rev
($807K)	($5M)	($11K)	($1M)	$5M	($8M)	($1M)	($336K)	($7M)	($1M)	Owner earningsOwner earn.
−2.9%	−12.2%	−0.0%	−2.1%	8.2%	−11.5%	−2.1%	−1.4%	−20.7%	−3.2%	Owner earnings marginOE mgn
($807K)	($5M)	($11K)	($1M)	$5M	($8M)	($1M)	($336K)	($7M)	($1M)	Free cash flowFCF
−2.9%	−12.2%	−0.0%	−2.1%	8.2%	−11.5%	−2.1%	−1.4%	−20.7%	−3.2%	Free cash flow marginFCF mgn
-5%	-10%	-2%	-1%	3%	2%	-18%	-54%	-23%	-6%	ROICROIC
1%	-4%	-3%	-0%	6%	-5%	-17%	-50%	11%	15%	Return on equityROE
1%	−4%	−3%	−0%	6%	−5%	−17%	−50%	11%	15%	Retained to equityRetained/eq
										Balance sheet
$186K	$2M	$5M	$6M	$20M	$13M	$12M	$7M	$31M	$34M	Cash & investmentsCash+inv
$5M	$11M	$12M	$7M	$5M	$11M	$8M	$4M	$12M	$5M	ReceivablesReceiv.
$4M	$7M	$7M	$10M	$12M	$21M	$22M	$6M	$5M	$7M	InventoryInvent.
$4M	$4M	$4M	$976K	$2M	$5M	$1M	$955K	$2M	$2M	Accounts payablePayables
$5M	$14M	$15M	$16M	$15M	$28M	$29M	$9M	$15M	$10M	Operating working capitalOper. WC
$10M	$20M	$25M	$24M	$38M	$46M	$42M	$32M	$51M	$49M	Current assetsCur. assets
$10M	$9M	$11M	$8M	$10M	$11M	$7M	$8M	$6M	$5M	Current liabilitiesCur. liab.
1.0×	2.2×	2.3×	3.1×	3.9×	4.1×	6.2×	3.9×	9.1×	10.6×	Current ratioCurr. ratio
$3M	$8M	$7M	$7M	$7M	$7M	$1M	$1M	—	$1M	GoodwillGoodwill
$17M	$36M	$40M	$39M	$52M	$56M	$48M	$37M	$53M	$51M	Total assetsAssets
$335K	$265K	$2M	$6M	$7M	$3M	—	—	—	$5M	Total debtDebt
$150K	($2M)	($3M)	($653K)	($12M)	($10M)	—	—	—	($29M)	Net debt / (cash)Net debt
-2.3×	-48.3×	-4.7×	-0.8×	3.3×	9.7×	-67.3×	-3889.6×	-1339.3×	-673.4×	Interest coverageInt. cov.
$7M	$27M	$29M	$29M	$42M	$44M	$40M	$27M	$46M	$45M	Shareholders’ equityEquity
0.6%	1.4%	1.1%	1.4%	2.7%	2.7%	3.9%	7.6%	5.7%	5.4%	Stock comp / revenueSBC/rev
										Per share
10.7M	12.6M	15.1M	16.5M	19.5M	19.7M	20.9M	21.4M	23.2M	24.7M	Shares out (diluted)Shares
$2.58	$2.94	$3.85	$3.14	$3.18	$3.67	$2.92	$1.15	$1.39	$1.42	Revenue / shareRev/sh
$0.01	$-0.09	$-0.06	$-0.00	$0.12	$-0.11	$-0.32	$-0.64	$0.22	$0.27	EPS (diluted)EPS
$-0.08	$-0.36	$-0.00	$-0.06	$0.26	$-0.42	$-0.06	$-0.02	$-0.29	$-0.05	Owner earnings / shareOE/sh
$-0.08	$-0.36	$-0.00	$-0.06	$0.26	$-0.42	$-0.06	$-0.02	$-0.29	$-0.05	Free cash flow / shareFCF/sh
$0.04	$0.05	$0.16	$0.05	$0.03	$0.03	$0.04	$0.01	$0.00	$0.00	Cap. spending / shareCapex/sh
$0.62	$2.11	$1.90	$1.77	$2.15	$2.25	$1.90	$1.27	$1.98	$1.84	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	8-yr	5-yr
Revenue / share	−7.4%/yr	−15.1%/yr
EPS	+49.0%/yr	—
Capital spending / share	−23.0%/yr	−37.0%/yr
Book value / share	+15.7%/yr	+2.3%/yr

The record, charted

FY2017–2025

Each measure over its full record; the current point and the worst year marked.

Share count

23Mpeak FY2025

ROIC

−23%low FY2024

Gross margin

50%low FY2024

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

($7M)owner earningsvs.$5Mnet incomelow FY2022

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $5M of profit but ($7M) of owner earnings: $12M less than the profit line, taken out by capital spending and the timing of cash.

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$5M	($14M)	($7M)	($2M)	$2M
Depreciation & amortizationnon-cash charge added back	+$772K	+$927K	+$1M	+$987K	+$924K
Stock-based compensationreal costnon-cash, but a real cost	+$2M	+$2M	+$2M	+$2M	+$2M
Working capital & othertiming of cash in and out, other non-cash items	−$14M	+$11M	+$3M	−$9M	+$671K
Cash from operations	($7M)	($108K)	($440K)	($8M)	$6M
Capital expenditurecash put back in to keep running and to grow	−$115K	−$228K	−$822K	−$530K	−$564K
Owner earnings	($7M)	($336K)	($1M)	($8M)	$5M
Owner-earnings marginowner earnings ÷ revenue	-21%	-1%	-2%	-12%	8%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $2M), owner earnings is nearer ($8M).

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? -1339.3×

Does not cover its interest

Operating income ($3M) ÷ interest expense $3K

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? +$28M

Net cash

Cash $31M − debt $3M

What this means
Cash and short-term investments exceed every dollar of debt by $28M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 214d

Long (60+ days)

DSO 131 + DIO 122 − DPO 39 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital -5%

Below average through the cycle

9-yr median, range -54%–3%; -19% latest = NOPAT ($3M) ÷ invested capital $18M

Industry peers: median 3%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran -19% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin -2%

Consumes cash through the cycle

9-yr median margin, range -21%–8%; latest ($7M) = operating cash ($7M) − maintenance capex $115K

Industry peers: median 11%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -21% of revenue this year, a -2% median across 9 years. Treating stock comp as the real expense it is (less $2M of SBC) leaves ($8M).
Are earnings backed by cash? -1.29×

Thinly cash-backed

Cash from ops ($7M) ÷ net income $5M

In the filing’s words And the filing leans heavily on adjusted, non-GAAP earnings — steering you off the GAAP figure just where the cash is not backing it. Read the reconciliation in the notes before taking the adjusted number.

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? —

Not enough data

What this means
The filing data didn't include the inputs for this check.
Investing or harvesting? 0.15×

Harvesting

Capex $115K ÷ depreciation $772K

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $32M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 9.13×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $3M vs $45M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (9-yr record) · 6 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.21/share (latest year $0.21), the averaged base the calculator's gate runs on, and book value is $1.86/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2017–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 3 of 9

What this means
Lost money in 6 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 6 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin −4% → −29% (3-yr avg ends)

In the filing’s words The filing attributes gains to higher prices, but the margin in the record has not followed — the claim outruns the result here.

What this means
Through the cycle the operating margin slipped — about −4% early to −29% lately, median −2% — competition or costs are biting in.
Reinvestment, incremental ROIC −31%

What this means
Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.
Worst year 2024 · −63.8% op. margin

What this means
Operations went underwater in 2024, understand why before trusting the good years.
How management talks about it Owner’s terms

What this means
Returns have thinned, but the filing discusses it in an owner’s vocabulary rather than selling past it — candor about a hard stretch counts for more than an adjective.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing Raised, but not as a competitor

The filing raises AI among its risks, but in other terms (security, regulation, energy or the like), not as a competitor to its product; it frames AI mainly as a capability.

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$49M

Cash & short-term investments$34M
Receivables$5M
Inventory$7M
Other current assets$3M

Current liabilities$5M

Debt due within a year$2M
Accounts payable$2M
Other current liabilities$682K

Current ratio10.63×all current assets ÷ what's due · Graham looked for 2×

Quick ratio9.17×stricter: inventory excluded

Cash ratio7.40×strictest: cash alone against what's due

Working capital$45Mthe cushion left after near-term bills

Debt due this year vs. cash$2M due · $34M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Cash runway30.5 yrsthe business is consuming cash; this is how long the cash on hand lasts at that rate

Revenue, latest quarter vs. a year ago+55.0%the freshest read on whether the business is still growing

Current ratio, recent quarters4.5× → 10.6×

Deeper floors

Tangible book value$44Mequity stripped of goodwill & intangibles

Net current asset value$44MGraham's net-net: current assets less all liabilities

Debt incl. operating leases$7M$1M of it operating leases

Deferred revenue$139Kcustomer cash collected before delivery; operating float

From the company's latest filing.

Acquisitions & goodwill

from the balance sheet & the 9-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$2M3% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity3%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$0over 9 years buying other businesses, against $7M of capital spent building

$7M written down across 2 years (2019, 2023): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 9-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid.

Insider ownership3.9%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$2M
The slice of the business handed to employees in shares this year, 6% of revenue. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why One Stop Systems Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2017–2025.

1 of the 4 tests turned up something to look into; the other 3 came back clean.

Look hereDid debt outgrow the business?$335K → $5M
Debt rose from $335K to $5M while owner earnings went from about ($2M) to ($3M): the borrowing grew and the earnings that would carry it are not there now. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.

And these came back clean

Is it less profitable than it was?
Did receivables and inventory outpace sales?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

How much of the revenue rides on one buyer?
≈$21M · 61% of revenue on the largest customers (TTM)
“In the year ended December 31, 2025, an aggregate of 61% of our total revenues were attributable to our top three customers.”verify →
Which reported numbers are a judgment call?
Management names Revenue recognition, Income taxes, Inventory, Stock compensation as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Technology Hardware

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
OMCLOmnicell	$1.2B	46%	2.3%	2%	11%
PARPAR Technology Corporation	$456M	22%	-15.1%	-8%	-8%
DGIIDigi International Inc.	$430M	53%	6.7%	5%	11%
ATENA10 Networks Inc.	$291M	78%	10.6%	38%	16%
QMCOQuantum Corporation	$280M	41%	-2.6%	—	-4%
MITKMitek Systems Inc.	$180M	—	7.3%	4%	20%
EVLVEvolv Technologies Holdings Inc.	$146M	34%	-154.2%	-81%	10%
OSSOne Stop Systems Inc.	$32M	31%	-1.6%	-5%	-2%
Group median	—	41%	0.3%	2%	10%

The price

What a price has to assume.

What the price implies

reverse-DCF

One Stop Systems Inc. is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.

Today’s price $

The assumptions Required return 9% Years to get there 10 Revenue growth 0%

Revenue, delivered−14%/yr’20→’25

Mature owner-earnings margin 15%

Enter a price to run it.

Owner earnings it must reach—

Margin the price demands—

Owner-earnings margin today−3%

Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.

Weigh OSS against another business →

The owners of OSS: the meeting and the votes →

Cite: Owner Scorecard, "One Stop Systems Inc. (OSS), the owner's record," https://ownerscorecard.com/c/OSS, data as of 2026-07-09.

Manual order: ← OSPN its page in the Manual OSW →

Industry order: ← NTAP the Technology Hardware chapter P →