ONE STOP SYSTEMS, INC.

Where It Passes

Where It Falls Short

• Valuation models0% pass✗ 4▾

  OSS overvalued: all 4 models price fair value below $4.51 (median $3.21)

  Graham fair value$3.03

  ✗Graham-48.8% margin vs $4.51

  Buffett fair value$2.74

  ✗Buffett-64.6% margin vs $4.51

  Lynch fair value$3.60

  ✗Lynch-25.3% margin vs $4.51

  Pabrai fair value$3.39

  ✗Pabrai-33.0% margin vs $4.51
• Profitability6% pass✓ 7✗ 28▾

  15 of 16 flag OSS's profitability — Graham, Buffett, Lynch +12 more

  Positive EPS (10 years)3/10 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)3/10 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-11.1%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-10.5% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$5.7M

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)N/A (negative mean EPS)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)1.25

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR16.4%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  ROE1.1%

  ✗Lynch> 15%

  EBIT / Enterprise Value-4.1%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-4.1%, ROC=-22.9%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets9.63%

  ✓PiotroskiROA > 0

  ROA Change YoY-36.92% -> 9.63% (delta: +46.55%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=-12.40%, ROA=9.63%

  ✗PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY2.5% -> 49.6%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue-47.9%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity1.1%

  ✗Dreman> 12%

  Margin of SafetyP/E=20.5x, P/B=2.4x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity-18.7% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency3/9 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-54.7%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity1.1%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-13.0% (2023) -> -10.5% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 29.5% -> 49.6%, operating margin -13.0% -> -10.5%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+0.38%; #3097/6340 (top 48.8%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+29.64%; #1455/3702 (top 39.3%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+1.12%; #2835/5226 (top 54.2%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.1646; #4020/5884 (top 68.3%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR16.4% over 4 years

  ✓Neff7%-20% annualized

  Positive Diluted-EPS Years3/9 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Verdicts7% pass✓ 1✗ 14▾

  Split decision: 13 FAIL · 2 NEUTRAL · 1 PASS

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (1/9)✗LynchFAIL (1/7)✗GreenblattRank #2115✓PiotroskiPASS (F-Score 5)✗DremanFAIL (3/11)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (0/5)✗AckmanFAIL (1/9)✗TempletonFAIL (2/8)✗SleepFAIL (1/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (1/6)✗SchlossFAIL (2/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage8% pass✓ 3✗ 12▾

  11 of 12 flag OSS's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest Coverage

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity

  ✗Lynch< 0.33

  Cash - Long-term Debt

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities5.70

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-1339.3x, D/EBITDA=N/A

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)

  ✗AsnessTop 30% of eligible cross-section
• Valuation8% pass✓ 2✗ 26▾

  12 of 13 flag OSS's valuation — Graham, Lynch, Greenblatt +9 more

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio2.4x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)1.25

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-4.1%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-4.1%, ROC=-22.9%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS20.5x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  Price / Book Value per Share2.4x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=20.5x, OE Yield=5.1%

  ✓MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=20.5x, FCF Yield=-5.9%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=20.5x, P/B=2.4x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Price vs. Trailing Low195% of trailing low ($2.31)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+0.38%; #3097/6340 (top 48.8%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.3392; #3511/6449 (top 54.4%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS20.5x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share2.43x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+6.0%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.1514; #4043/5247 (top 77.1%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-5.90%; #3032/4519 (top 67.1%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-42.18%; #4892/6202 (top 78.9%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Cash Flow10% pass✓ 1✗ 11▾

  9 of 10 flag OSS's cash flow — Lynch, Piotroski, Dreman +6 more

  Free Cash Flow Proxy$5.7M

  ✓BuffettPositive and growing

  FCF Positive and Growing$-6.7M

  ✗LynchPositive and growing

  Operating Cash Flow$-6.6M

  ✗PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=-12.40%, ROA=9.63%

  ✗PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  P/E or FCF YieldP/E=20.5x, FCF Yield=-5.9%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive1/9 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-6.0%

  ✗Ackman>= 4%

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency2/9 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-6.7M

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-5.90%; #3032/4519 (top 67.1%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth25% pass✓ 4✗ 9▾

  6 of 8 flag OSS's growth — Graham, Lynch, Marks +3 more

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)1.25

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR16.4%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: -10.5% vs Rev: -71.6%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$0.01 (2017) -> $0.22 (2025)

  ✓DremanPositive over recent years

  EPS CAGR47.2% CAGR over 8 years

  ✓Dreman> 5% annualized

  Positive Net Income Frequency3/9 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-15.9%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency2/5 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 29.5% -> 49.6%, operating margin -13.0% -> -10.5%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR-9.1%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR16.4% over 4 years

  ✓Neff7%-20% annualized
• Efficiency25% pass✓ 3✗ 8▾

  6 of 8 flag OSS's efficiency — Buffett, Greenblatt, Piotroski +3 more

  Current Ratio5.70

  ✓Graham>= 2.0

  ROIC (3-5 yr avg)-12.6%

  ✗Buffett> 10%

  ROIC - WACC-22.6%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-22.9%

  ✗Greenblatt> 25%

  Current Ratio Change YoY3.93 -> 9.13

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.66x -> 0.61x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities5.70

  ✓Dreman> 1.5

  Return on Invested Capital

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=-15.0%; FY2024: ROIC=-43.9%; FY2025: ROIC=unavailable

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/4 years above 12% (latest -43.9%)

  ✗SleepROIC > 12% in a majority of years