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.
• Delays in our production cycle could result in outdated equipment or decreased purchases of our products.
• 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.
• 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.
• 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 maintain effective internal control over financial reporting in the future, the accuracy and timeliness of our financial reporting may be adversely affected. In addition, because of our status as an emerging growth company, you will not be able to depend on any attestation from our independent registered public accounting firm as to our internal control over financial reporting for the foreseeable future.
• 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.
• 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.
• 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.
• Substantial future sales of shares of our common stock could cause the market price of our common stock to decline.
• Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.
• We have never paid cash dividends on our capital stock, and we do not anticipate paying cash dividends in the foreseeable future.
• If an active, liquid trading market for our common stock does not develop, you may not be able to sell your shares quickly or at or above the initial offering price.
• 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.