OSS One Stop Systems Inc.

Risks

• The market for our products is developing and may not develop as we expect.
• Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or our guidance.
• Our products are subject to competition, including competition from the customers to whom we sell.
• New entrants and the introduction of other distribution models in our markets may harm our competitive position.
• If we are unable to manage our growth and expand our operations successfully, our business and operating results will be harmed and our reputation may be damaged.
• A limited number of customers represent a significant portion of our sales. If we were to lose any of these customers, our sales could decrease significantly.
• We rely on a limited number of parts suppliers to support our manufacturing and design processes.
• Our future success depends on our ability to develop and successfully introduce new and enhanced products that meet the needs of our customers.
• Unsuccessful government programs or OEM contracts could lead to reduced revenues.
• Our inventory may rapidly become obsolete.
• We offer an extended product warranty to cover defective products at no cost to the customer. An unexpected change in failure rates of our products could have a material adverse impact on our business.
• If we fail to achieve design wins for our products, our business will be harmed.
• If we cannot retain, attract and motivate key personnel, we may be unable to effectively implement our business plan.
• We have made in the past, and may make in the future, acquisitions which could require significant management attention, disrupt our business, result in dilution to our stockholders, deplete our cash reserves and adversely affect our financial results.
• The continuing commoditization of HPC hardware and software has resulted in increased pricing pressure and may adversely affect our operating results.
• Our election to not opt out of the extended accounting transition period under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, may make our financial statements difficult to compare to other companies.
• If we are unable to protect our proprietary design and intellectual property rights, our competitive position could be harmed or we could be required to incur significant expenses to enforce our rights.
• Many of our proprietary designs are in digital form and the breach of our computer systems could result in these designs being stolen.
• Our proprietary designs are susceptible to reverse engineering by our competitors.
• If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
• Claims by others that we infringe their intellectual property or trade secret rights could harm our business.
• We are generally obligated to indemnify our channel partners and end-customers for certain expenses and liabilities resulting from intellectual property infringement claims regarding our products, which could force us to incur substantial costs.
• Our international sales and operations subject us to additional risks that can adversely affect our operating results and financial condition.
• We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws.
• New regulations or standards or changes in existing regulations or standards in the United States or internationally related to our suppliers products may result in unanticipated costs or liabilities, which could have a material adverse effect on our business, operating results and future sales, and could place additional burdens on the operations of our business.
• We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.
• The price of our common stock may be volatile, and you could lose all or part of your investment.
• Our directors and principal stockholders own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
• If securities or industry analysts issue an adverse opinion regarding our stock or do not publish research or reports about our company, our stock price and trading volume could decline.
• Substantial future sales of shares of our common stock could cause the market price of our common stock to decline.
• We have never paid cash dividends on our capital stock, and we do not anticipate paying cash dividends in the foreseeable future.
• Our inability to raise additional capital on acceptable terms in the future may limit our ability to develop and commercialize new solutions and technologies and expand our operations.
• We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.