NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION

Nature of Operations

One Stop Systems, Inc. (“we,” “our,” “OSS,” or the “Company”) was originally incorporated as a California corporation in 1999, after initially being formed as a California limited liability company in 1998. On December 14, 2017, the Company was reincorporated as a Delaware corporation in connection with its initial public offering. The Company designs, manufactures, and markets specialized rugged high-performance compute ("HPC"), high speed switch fabrics, and storage systems, which are designed to target edge applications for artificial intelligence ("AI") / machine learning ("ML"), sensor processing, sensor fusion, and autonomy. The Company markets its products to manufacturers of equipment and platforms used for autonomous vehicles, medical, industrial, aerospace, and defense applications, with special focus on platforms that move, such as planes, unmanned aerial vehicles (UAVs), trucks, ships, submarines, and mobile datacenters or command posts where sensor processing, sensor fusion, AI, and ML are integrated to support such applications.

During the year ended December 31, 2015, the Company formed a wholly owned subsidiary in Germany, One Stop Systems, GmbH (“OSS GmbH”). On October 31, 2018, OSS GmbH acquired 100% of the outstanding stock of Bressner Technology GmbH, a limited liability company registered under the laws of Germany and located near Munich, Germany (“Bressner”). On December 30, 2025, the Company entered into and completed a Shares Purchase Agreement with Hiper Euro GmbH, pursuant to which the Company sold 100% of the issued and outstanding equity interests of One Stop Systems, GmbH (“OSS GmbH”), the Company’s German subsidiary and the sole owner of Bressner. The transaction represents a strategic shift in the Company’s operations, as the Company exited its European distribution and integration business and is now focused on its core high-performance edge computing solutions.

Following the transaction, the Company has continued to focus on the development and sale of proprietary and differentiated edge computing solutions and has enhanced its efforts to penetrate the military and defense sectors.

Basis of Presentation

The accompanying consolidated financial statements have been prepared on an accrual basis of accounting in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”), as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”).

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation. All operations, assets, and liabilities of the Bressner business, which was divested on December 30, 2025, have been classified as discontinued operations in all periods presented. Unless otherwise noted, amounts and disclosures in these Notes to Unaudited Consolidated Financial Statements pertain to the Company's continuing operations. See Note 13, Discontinued Operations, for further details on Discontinued Operations.

Principles of Consolidation

The accompanying unaudited consolidated financial statements include the accounts of OSS and its wholly owned subsidiaries. The accounts of OSS GmbH, which include Bressner, have been classified as discontinued operations. Intercompany balances and transactions have been eliminated in consolidation.