One Stop Systems Q1 2023 Earnings Call Transcript

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May 11, 2023

There are 7 speakers on the call.

Operator

Afternoon and thank you for joining us today to discuss One Stop Systems Financial Results for the Q1 Ended March 31, 2023. With us today are the company's President and Chief Executive Officer, David Rahn and Chief Financial Officer, John Morrison as well as the company's Chief Product Officer, Jim Eisen. Following their remarks, we will open the call to your questions. Then before we conclude this call, I will provide some and information regarding the forward looking statements made by management during the call. I would like to remind everyone that the call will be recorded and made available for replay in the Investors section of the company's website.

Operator

Now, I would like to turn the conference over to OSS President and CEO, David Rawn, please go ahead, sir.

Speaker 1

Thank you, Chris, and good afternoon, everybody. In the Q1, Our consolidated revenue totaled $16,800,000 slightly above our guidance of $16,600,000 Excluding the lower margin Media business, our OSS Classic revenue increased 17% for the quarter compared to the same period a year ago. OSS Europe also had strong revenue growth increasing 26%. That includes $1,200,000 of OSS core product sales as we engage with more industrial and military AI transportable European customers. In contrast, we sold approximately 180,000 of OSS products in Europe in the Q1 of 2022.

Speaker 1

Our overall gross margin was 30.2% in the first quarter, up from 27.3% last quarter and a slight increase from the year ago period, driven by increased sales of OSS core products in the U. S. And Europe as well as a planned reduction of low margin sales to our legacy media customer. As you may recall that in February, we announced of a $1,300,000 contract directly with the U. S.

Speaker 1

Army for the design, development and prototypes for a rugged 360 degree visualization compute system for land vehicles, including the Stryker, Bradley and Abrams. We expect to start to realize revenue from this contract in Q2. The program represents a significant revenue opportunity, while also potentially opening other applications within the Army. We are engaged with several Air Force opportunities both directly and through top 10 prime contractors. Early proof points with the Air Force include yesterday's announcement, plus we recently learned from another prime They won a contract that includes our flagship compact supercomputer Rigel.

Speaker 1

We expect to announce more about this win and ship product later this year. In both cases, These were new prime contractors for OSS providing additional exposure and visibility to other key programs. Additionally, in Q1, we continued advancing in multiple industrial markets, including autonomous trucks and agriculture and several other defense related opportunities throughout the DoD in the U. S. And Europe.

Speaker 1

Before I comment further on our growth strategy and outlook, I've asked John to comment on the financials and Jim to expand on these customer wins and opportunities. John?

Speaker 2

Thank you, David, and good afternoon, everyone. Thank you for joining us today. Today, we issued a press release with our results for the 1st quarter ended March 31, 2023. The release is available in the Investor Relations section of our website atonestopsystems.com. The following results are for the Q1 of 2023 as compared to the same period and 2022.

Speaker 2

Consolidated revenue declined $271,000 to $16,800,000 This included an expected $3,000,000 reduction in revenue from our low margin media customer, which was mostly offset by 21.8% growth increase in sales to other OSS customers. As clarification, OSS Classic is defined as all shipments from U. S. Operations delivered throughout the world. Similarly, OSS Europe is defined as all shipments originated from European operations.

Speaker 2

References to OSS core products are those products that are designed in the U. S. And sold through both operations and they tend to yield higher margins. OSS Classic revenue decreased 18.4% to $8,600,000 for the quarter, representing 51% of total revenue. Excluding lower margin media Customer revenue.

Speaker 2

OSS Classic revenue increased 17.2%. Revenue from OSS Europe increased 26 percent to $8,200,000 including an incremental $1,000,000 of higher margin OSS core products. OSS Europe represented 49% of total quarterly revenue. Our overall gross profit in the first quarter was $5,100,000 Our margins increased 10 basis points and sequentially by 2 90 basis points to 30.2% attributable to a greater mix of AI transportable products. The gross margin for our OSS Classic business increased 60 basis points to 36.3, attributable to the greater mix of AI transportable products.

Speaker 2

Our OSS Europe's gross margin percentage improved 280 points to 23.8% compared to 21% due to our due to more OSS core product content being sold into European markets. Overall, quarterly operating expenses increased 17.3 percent to 5,300,000 with operating expenses as a percentage of revenue increasing to 31.4% compared to 26.3%. This increase in operating expenses was primarily due to increases of $510,000 in general and administrative expenses with $249,000 being attributable to CEO transition costs. Marketing and selling expenses increased $310,000 with approximately $100,000 attributable to severance costs associated with the recent realignment of sales resources to support our AI transportable strategy. The increase in operating expenses was partially offset by a decrease of $49,000 in R and D and Spec expense.

Speaker 2

Loss from operations was $196,000 compared to income from operations of $650,000 in the same period in 2022. This difference was predominantly attributable to higher operating expenses. Net loss on a GAAP basis was $401,000 or negative, a loss of $0.02 per share as compared to net income of $579,000 or $0.03 per share. On a non GAAP basis, The net income was $90,000 or $0.00 per share, down from non GAAP net income of 978,000 or $0.05 per share. Adjusted EBITDA, a non GAAP metric, was 530,000 or 3.2 percent of quarterly revenue, a decrease from 1,400,000 Turning to our balance sheet.

Speaker 2

As of March 31, 2023, cash and cash equivalents totaled 3,500,000 with short term investments of $9,200,000 for a combined total of $12,700,000 This represents a decrease of $547,000 compared to cash equivalents and short term investments as of December 31, 2022. Our cash decrease was attributable strategic inventory purchases and working capital requirements. We believe the current financial resources available to OSS provides us with the stability and flexibility to be responsive to changes in business demands and particularly those that require investments and working capital in order for us to be successful. This completes our financial review for the quarter. I would like to now turn the call over to our Chief Product Officer, Jim Eisen.

Speaker 2

Jim?

Speaker 3

Thank you, John, and good afternoon, everyone. In Q1, we added 7 new major program wins. We expect these wins to yield about $5,000,000 in revenue this year. 3 of these wins were in AI transportables, including the ruggedized compute visualization system for the U. S.

Speaker 3

Army, a U. S. Air Force anti electronic warfare system and a new autonomous truck server win. The remaining wins were in medical, finance and industrial manufacturing applications. As Dave mentioned, we won a $1,300,000 order from the U.

Speaker 3

S. Army in February. We will continue to work closely with the U. S. Army as we remain on track to deliver prototypes later this year.

Speaker 3

In addition to providing 360 degree situational awareness systems as part of this contract, there are additional opportunities to broaden the AI transportable applications within this customer, including sensor acquisition, object recognition and Friend or Foe identification. We were chosen by the U. S. Army for our years of experience creating compact, rugged compute accelerators and connecting them with the latest generation of PCI Express technology, providing a very low latency solution. Yesterday, we also announced a $3,500,000 U.

Speaker 3

S. Air Force program win procured through a new prime contractor for SDS storage servers. We see this design win leading to other AI transportable applications inside this prime contractor, including similarly configured SDS servers for compute acceleration and data acquisition. In addition to the 2 DoD wins, the other AI transportable win, including servers for our current autonomous truck customer, where we are actively deploying Centauri storage solution. Our ability to win multiple designs within an account is key to our strategy as we build a leadership position in AI transportable application.

Speaker 3

We also added 3 new pending major programs during the quarter. We expect such pending major programs to each generate $1,000,000 or more in revenue over 4 years with a 60% or greater likelihood of closing. Our pipeline of pending major programs at the end of Q1 totaled 34 with 18 of these involving AI transportable applications in the U. S, Asia Pacific and Europe. On the product front, our innovative flagship product Rigel recently obtained full NVIDIA certification and stands as the only certified rugged edge supercomputer based on NVIDIA's HTX A100 GPU.

Speaker 3

OSS and NVIDIA announced the certification together at the AUVSI show earlier this week, where OSS sales engineers engaged with autonomous vehicle customers for trucks, drones and ships. Both Rigel and our Gen5 ForuPro accelerator system include the OSS proprietary Unified Baseboard Management controller or UBMC. The UBMC software manages, monitors and controls the telemetry of these OSS products using OSS developed software to provide customers with advanced features that set our systems apart. The secure software in the UBMC allows our customers to unify their systems management, providing unique benefits for the for using several OSS products on a vehicle, such as data acquisition, data storage, acceleration and autonomous vehicle compute. Our plan is to include the basic software in our products, but provide additional capabilities and solutions via a recurring software revenue model.

Speaker 3

This strategy creates additional value, product stickiness and may eventually lead to a higher margin software revenue stream. More OSS products will contain the UBM C functionality and software moving forward. Now with that, I'd like to turn the call back over to Dave. Dave?

Speaker 1

Thank you, Jim. As communicated on our last call, 2023 is a transitional year for OSS on many fronts ranging from reducing low margin business, increasing high margin AI transportable business, bringing down inventory levels, delivering more military proof points and the addition of new talent. We are projecting growth from our industrial portion of the business, including autonomous trucks, cellular carrier trucks and agricultural equipment as well as multiple segments within the military. Our 2023 objective remains the same: to offset the reduction of our lower margin Media business with AI transportable growth and move back into an overall growth mode and 2024 as we did in 2021 2020. As we have outlined in our investor presentation, We believe the AI transportable market has solid tailwinds with a push to add AI and autonomous capabilities in several industrial verticals and throughout the military market.

Speaker 1

As with many companies, we identify opportunities maintain a pipeline database. In our case, we include identified target opportunities that should need our products, which we are pursuing opportunities in which we are engaged with the customer, pending wins and confirmed program wins, many of which we project will generate revenue. The current total identifiable value of these opportunities over the 3 years, including 2024 through 2026 is approximately $850,000,000 and growing. After we apply weighted and judged probabilities to these opportunities, the outcome supports solid growth projections for 2024 and beyond, with estimated growth rates in the range of 20% to 30%. These opportunities represent a combination of industrial and military applications with the percentage of military applications growing each year.

Speaker 1

Last year, we announced a partnership with key autonomous truck companies utilizing our storage and service product line. 2 of these truck companies rose to our top 10 customer list for last year. As Jim outlined, we had another program win at 1 of the 2 customers this past quarter. We believe the segment of the market will continue to grow. Upon reaching a production state, the segment could produce a significant inflection point in upward revenues for OSS.

Speaker 1

As we look forward, we see additional verticals leveraging similar OSS capabilities developing over time. For example, we have a pending win that is expected to close and provide Q2 revenue for an autonomous boat. In parallel to the industrial progress, we have remained focused over the past 2 years on the pursuit of AI transportable opportunities within the military theater, which takes significantly longer to develop. Nevertheless, the Army, Navy, Marine Corps and Air Force are all deploying autonomous and or AI capabilities, create new opportunities and tailwinds for OSS. We believe these divisions of the military with a broad base of opportunities that drive higher margins and revenue, combined with the innovation of the OSS team, will be the primary building blocks for value for our shareholders over the coming years.

Speaker 1

Looking ahead for the Q2 of 2023, we expect revenue of approximately 17,500,000 On Wednesday, May 17, we'll be holding our virtual Annual Stockholder Meeting at 11 a. M. Pacific Time. We encourage you to participate by voting as recommended by the Board of Directors. And finally, As previously disclosed, we've been running a rigorous search and selection process to identify a successor CEO and a DPS sales with extensive military experience and contacts to accelerate the company's advancement to the next level.

Speaker 1

The Board and I are pleased with the quality of the candidates, their sincere interest in OSS and anticipate the finalists will win the support of you, our investors as well as our employees and customers. We expect to remain on schedule to have a successor in place by the end of June. I look forward to working with the new CEO as a member of the Board of Directors on a smooth and productive transition. It has been an honor to be the CEO of OSS over the past 3 years and get to know the great employees, investors and customers in the process. I appreciate your support and look forward to staying in contact through this transition and as a Director.

Speaker 1

Now with that, I'd like to open the call up to questions. Chris?

Operator

Thank you. And your questions will be pulled in the order they are received. Your first question comes from Eric Martinuzzi, Lake Street. Eric, please go ahead.

Speaker 4

Yes. Good job on the revenues there. I'll get to the expense side of the equation in one of my subsequent questions. But Wanted to start out with just for the just kind of the outlook here for the first half of twenty twenty three. Given the print in Q1 and the outlook for Q2, it looks like we're kind of we're in sort of a minus 3% on the revenue growth year on year for the first half and that's assuming you come in at the 17.5% for Q2.

Speaker 4

Wanted to know what your expectation is for the back half because you've laid out the plan at least as of last quarter was to offset The M and E decline in revenue with other program wins, is that still the expectation that we're going to be Roughly flat for the year or is it if the back half is like the front half, we could be down low single digits?

Speaker 1

Yes. Thanks. Good question. So Eric, yes, it looks like the first half, we're a little off. As far as the second half, we don't have as much Visibility as we do the first, of course.

Speaker 1

Our objective is the same, to replace that. It's a big challenge. There's no doubt about it, but that's the objective and we're driving towards that. We do have programs in the pipeline that allows us Do that as long as they come in with some judgment. And so again, our objective is to be as close as possible to last year's number.

Speaker 4

Okay. And then I did appreciate the kind of further look out the slide that you put up about the growth in 2024 and beyond, that pipeline, that $850,000,000 that you're Talking about over the next 3 years, can we do we have a frame of reference for that? What was that If we were if we jump back a year ago, what was that pipeline looking like? How much has it grown Or maintained?

Speaker 1

Sorry, I don't have an exact number. It's definitely grown. But and I will just add a little color to that. I want to make sure everybody knows. I mean that's a mixture of everything from solid design wins to identified targets and everything in between.

Speaker 1

And we've applied judgments anywhere from a 2% probability and Weighting coming out the other side to 90% depending on it. But it has steadily grown. I would guess, Eric, it's somewhere in the area of 25% to 30% larger than it was a year ago.

Speaker 4

I like the sound of 20% to 30% organic growth. I know you're not guiding to that. It's really more of Big picture analysis that you've given us, but certainly it sounds like the media customer will be behind us As of FY 2024, is that correct?

Speaker 1

Yes. I think all assumptions should be that.

Speaker 4

Okay. And then on the operating expense side, I was a little bit off there. I appreciate the color you talked about the 3 different puts and takes, 2 to the negative and 1 a slight offset. What should we be thinking about for operating expense for the 2nd quarter?

Speaker 2

The Q2 with the current plan right now is that we will be accruing all Severance related with the departure of David as of June 30. As previously disclosed in the 8 ks, his severance package Includes approximately 1 year of income. So we will have be accruing that as of June 30. We also have additional costs for legal expenses And search costs. That cost that could run-in the neighborhood of an additional about $600,000 to $800,000

Speaker 4

Okay. And then kind of normalized post the Maybe I should have asked what's Q3 look like. I'm just trying to figure out where do we normalize on the OpEx?

Speaker 2

Q3 were going to be right around 5,700,000

Speaker 1

One of the things I'll add to that is that the dynamics with the increased spending It's not something where we've opened floodgates of hiring people. We've hired very few. And we do have Hiring in the number that John just mentioned for Q3, we'll keep an eye on that depending on how we progress on multiple fronts.

Speaker 4

Okay. And just a final comment, it's good to see those wins with the new Prime contractors, I got to believe that there's more behind that as far as other program wins in the pipeline That maybe we've kind of broken the log jam with some primes that we haven't worked with before. Is that a fair assessment?

Speaker 1

Yes, absolutely. I mean, we're very bullish on this front. It's just the frustration is just the long process in the military. I mean, the activity is just as I shared last time, It's very strong in the military.

Speaker 4

Great. Thanks for taking my questions. Thank you, Eric.

Operator

Thank you. Your next question comes from Brian Kinstlinger, Alliance Global Partners. Brian, please go ahead.

Speaker 1

Hi, Brian.

Speaker 5

Hi, there. This is Sherwin on for Brian. Thanks for taking the question. It's great to see the growing pipeline of opportunities for the company, 25% to 30% larger is great to hear. I see that that figure is made up of Targets, opportunities, pending wins and wins.

Speaker 5

Could you, A, quantify the pipeline of just pending wins and wins? And then, B, a little bit more near term focus, quantify the pipeline of bids submitted and planned opportunities you expect will generate revenue within the next 18 months? Thanks.

Speaker 1

Yes. I would say the pending and wins are about half the number As far as the left side of the funnel, and then it's about 2 thirds of the number on the right side of the funnel, Meaning that 2 thirds of what we see to drive 20% to 30% growth, 2 thirds of that's already either in a pending or win category. And the balance would be between opportunities that we're engaged in and targets where We recognize an opportunity, hopefully that helps.

Speaker 5

Sorry, just to clarify and make sure I understood correctly. You're saying of the A50, 2 thirds are on the right side of the funnel and pending wins and wins and then of the remaining third, is between targets and opportunities?

Speaker 1

Yes, the third would be that to be on the right side of the funnel. That's approximate number. I'm just looking at numbers real quick.

Speaker 5

Yes, yes, just generally.

Speaker 1

And keep in mind, a pending win for us means that we think the probability is 60% or higher.

Speaker 4

Yes, yes, I saw that.

Speaker 1

You really think we're going to close it. It's just that Tom don't,

Speaker 4

of course.

Speaker 5

Okay. And then about the quantify could you quantify the pipeline of bids Or planned opportunities bid submitted that you expect will generate revenue within the next 18 months?

Speaker 1

Could you ask that question one more time?

Speaker 5

If you could quantify the pipeline of bids submitted or planned opportunities you expect will generate revenue within the next 18 months?

Speaker 1

I don't have a specific number to quantify it that way. That says the next I would just say that The numbers as we rack and stack these things have produced the type of growth that we mentioned All right. I don't have any further clarification on that, sorry.

Speaker 5

All right. Thank you. Next question, It's been great to see the inflow program wins since the start of this year. We've closed a lot of great opportunities. Could we expect this rate to continue or pick up?

Speaker 5

I know you mentioned that these military contracts have long cycles, but have you seen any of the government turmoil recently spill into delaying decision making Even further from the long sales cycles that we've seen for your military clients, which could slow down awards and revenue generation?

Speaker 1

I think it's impacted us some because definitely things are taking longer than we expected. And I'm sure that's a combination of maybe Just normal things get delayed and maybe we were too optimistic combined with dynamics in the government. But in general, the overall theme and Positiveness about the military market and its opportunity to generate revenue for us hasn't changed.

Speaker 5

Great. Thank you. And last question, over the past few quarters, your company has had around 13 dollars 14,000,000 of cash on hand. Where is M and A on your priority list? Is it high or low?

Speaker 5

And what are your plans in general for capital deployment, if any?

Speaker 1

I think in the short term, we're focused on the organic opportunity. And although we have some cash, that cash is not Wouldn't go that far in an acquisition. And we also believe that when we do M and A, we better Make sure it's really obvious to the investors why we're doing it, number 1. And number 2, it's sizable and worthwhile doing. We don't want to We're doing $5,000,000 deals to tie up the team and move away from organic growth.

Speaker 1

So for the most part, we're very laser focused on organic

Operator

Your next question comes from Joe Gomez, NOBLE Capital. Joe, please go ahead.

Speaker 6

Hey, David, John and Jim. Thanks for taking my questions.

Speaker 1

Hi. Hi, Joe.

Speaker 6

So David, you talked about The CEO search in mid June, you didn't mention really much anything more on the VP sales search. Just Wondering if you can give us a little update on that?

Speaker 1

Yes, absolutely. So a couple of things. What we've been doing is interviewing VP of Sales candidates. And what I'm really trying to do is have a handful of them that are qualified by not just myself but some other individuals that we think Part of the level that we should consider. And what I'd like to do is once we have a new CEO on in place To be able to quickly move to filling that spot.

Speaker 1

I think it's unless we get a guy that's just really, really clear We should hire them under any circumstance. That's what we're doing is get the CEO in here, let him get involved and be a key part of the decision making process. We've also with some of these candidates, they've indicated that they have some very strong VPs of sale candidates that they could bring along. So That's the situation there. Hopefully to answer that, hopefully, we get the CEO in place and we get our VP of sales in place in July.

Speaker 6

Okay, great. And you mentioned in your commentary, one of the goals was to bring inventory levels Yeah. And I think John mentioned that you increased inventory or out there buying some inventory During the quarter, just trying to get a little better handle on the inventory situation today.

Speaker 2

I'll address that question. I will first respond, breaking into 2 parts, addressing the portion attributable to OSS Europe And then the portion that's attributable to OSS Classic. With respect to OSS Brashear, They had a shipment from Taiwan go on the water about 1 week earlier than anticipated and that It's done at FOB Shipping Point. So basically, the ship left a week earlier than anticipated. It was to be done in April.

Speaker 2

It left for it in March. So that was all associated with product For Q2, it's been identified and it will be sold in Q2 period. So that was a timing issue. And that was approximately $1,200,000 of inventory that was on the water. With respect to OSS Classic, it represents about $1,600,000 It is as a result of some Gen 5 Broadcom chips being delivered in advance of the Originally planned delivery date, we were required to take them.

Speaker 2

Otherwise, we would have had to get back in line with a 52 week lead time and an increase of 6% to 13% increase in price. So we went ahead and took those ships in advance When they were originally planned to come in.

Speaker 1

So I'd just add to that. So our intent is to bring down the inventory, as we said. This caught us off the little guard. Fortunately, these are products we need. In the case of the Europe stuff, it We burned off pretty quickly in the case of the switches, it will take us a longer period of time, but they're key to our products that go into almost everything.

Speaker 2

Long term by year end, we hope to bring inventory down to around $16,000,000 And

Speaker 1

in general, just if you're wondering about our concerns about the inventory, we analyze this every quarter internally and with our auditors and Appropriately write off things as needed. And we do not believe we have a big exposure out there.

Speaker 6

Okay. Thank you for that. On OSS Europe and the selling Significant increase in core OSS products being sold there. How did that kind of come about? And how do you See that playing out here going forward.

Speaker 6

Do you see significant growth opportunity of selling some of the core OSS product through the European channel?

Speaker 1

You want to take it, Jim? Sure.

Speaker 3

Yes. It's been in the works for several years where we've put a team in place in the European operation Focused on the OSS and AI transportable products. So they're a key part of the strategy of AI transportables in general. The growth is starting to show now, which is what the goal was. I see it continuing down this path as they continue to bring on and you'll see some design wins Coming out of AI Transportables from the European operation.

Speaker 1

Yes. This is good news. It's something we thought we would have in place a lot earlier. But Anyway, it should be a trend that continues.

Speaker 6

Great. I'll get back in queue. Thanks, guys. Appreciate it.

Speaker 4

Good talking to you, Joe. Thanks, Joe.

Operator

Thank you. There are no further questions at this time. I will now turn it back to our speakers for closing remarks.

Speaker 1

Thank you everybody for joining us today. We've enjoyed sharing our latest progress at OSS with you today and believe the company's strategy is solid and its future is bright. OSS Management looks forward to speaking with you again in August, if not sooner. In the meantime, as always, feel free to reach out to John and myself at any time. With that, let's go ahead and wrap up the call.

Operator

Thank you. Now before we conclude today's call, I would like to provide the company's Safe Harbor statement that includes important cautions regarding forward looking statements made during today's call. One Stop Systems cautions you that statements in the presentation that are not a description of historical facts are forward looking statements. These statements are based on company's current beliefs and expectations. Such forward looking statements include, for example, those regarding the company's expectations for revenue growth generated by new products, future changes to its business objectives and members of management, design wins and M and A activity, amongst other things.

Operator

The inclusion of such forward looking statements and others should not be regarded as a representation by OSS that any of its plans will be achieved. Actual results may differ from those set forth in the presentation due to the risks and uncertainties inherent in our business, including, without limitation, that the market for our products is developing and may not develop as we expect. Military conflicts, global pandemics or other disasters or public health concerns and economic instability in regions of the world where we have operations, customers or source material or sell products may affect such market. Our operating results could be negatively impacted by inflationary pressures, supply chain constraints, increased interest rates or other economic conditions. Our operating results may fluctuate significantly, which would make our future operating results difficult to predict and could cause operating results to fall below expectations or guidance.

Operator

If we are unable to offset anticipated future decreases in revenue in our media and entertainment space with other business, our operating financial results may be adversely affected. Our ability to successfully integrate operation systems, technologies, product offerings and personnel with acquired companies, if any, may prove difficult and adversely affect our financial results. Our products are subject to competition, including competition from to whom we may sell and competitive pressure from new and existing companies may harm our business sales, growth rates and market share. Our future success depends on our abilities to develop and successfully introduce new and enhanced products that meet the needs of our customers. The likelihood of our design proposals becoming design wins and uncertain and revenue may never be realized.

Operator

Our products fulfill specialized needs and functions within the technology industry and such needs or functions may become unnecessary or the characteristics of such needs and functions may shift in such a way as to cause our products to no longer fulfill such needs or functions. New entrants into our market may harm our competitive position. We rely on the limited numbers of suppliers to support a manufacturer design process. And if we cannot protect our proprietary design rights and intellectual property rights, our competitive position could be harmed or we could incur significant expenses to enforce our rights. Our international sales and operations subject us to additional risks that can adversely affect our operating results and financial condition.

Operator

We may not be able to accurately report our financial results and other risks described in our prior press releases and in our filings with the Securities and Exchange Commission, SEC, including under the heading risk factors in our annual report on Form 10 ks and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of the conference call, and we undertake no obligation to revise or update this information reflect events or circumstances after this date hereof. All forward looking statements are qualified in their entirety by this cautionary statement, which is made under the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Before we end today's conference, I would like to remind everyone that this call will be available for a replay starting later this evening through May 25, 2023. Please refer to today's press release for dial in and replay instructions available via the company's website at ir.onestopsystems.com.

Operator

Thank you for joining us today. This concludes your conference. You may now disconnect.

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Earnings Conference Call
One Stop Systems Q1 2023
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