OSS One Stop Systems Inc

 

As filed with the Securities and Exchange Commission on August 18, 2023

Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 

ONE STOP SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
 

Delaware	33-0885351
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employee Identification Number)

 

2235 Enterprise Street #110
Escondido, California 92029

(Addresses of Principal Executive Offices including Zip Code)
 

Inducement Nonqualified Stock Option Awards

Inducement Restricted Stock Unit Award

(Full title of the plans)

Michael Knowles

Chief Executive Officer

One Stop Systems, Inc.

2235 Enterprise Street #110

Escondido, California 92029

(760) 745-9883

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

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Copies to:

Dennis J. Doucette, Esq.

Procopio, Cory, Hargreaves & Savitch LLP

12544 High Bluff Drive, Suite 400

San Diego, CA 92130

(858) 720-630
 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐		Accelerated filer	☒
Non-accelerated filer	☐		Smaller reporting company	☒
			Emerging growth company	☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

 

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EXPLANATORY NOTE

One Stop Systems, Inc. (the “Company”) is filing this Registration Statement on Form S-8 (this “Registration Statement”) for the purpose of registering an aggregate of 835,715 shares of its common stock, par value $0.0001 per share (“Common Stock”), consisting of (i) 400,000 shares of Common Stock issuable upon the exercise of non-qualified stock options granted to Michael Knowles, the Company’s recently-appointed President and Chief Executive Officer, on June 5, 2023; (ii) 400,000 shares issuable upon vesting and settlement of Restricted Stock Units (“RSUs”) granted to Mr. Knowles on June 5, 2023; and (iii) 35,715 shares issuable upon vesting and settlement of RSUs granted to Robert Kalebaugh, the Company’s recently-appointed Vice President of Sales, on July 17, 2023 (collectively, the “Inducement Grants”).

The Inducement Grants were granted outside of the Company’s Amended and Restated 2017 Equity Incentive Plan, as amended, as an inducement material to Messrs. Knowles and Kalebaugh entering into employment with the Company, were unanimously approved by the Company’s Board of Directors, and were issued pursuant to the “inducement” grant exception under Nasdaq Listing Rule 5635(c)(4).

PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

 

The information called for in Part I of Form S-8 to be contained in the Section 10(a) prospectus is not being filed with or included in this Registration Statement (by incorporation by reference or otherwise) in accordance with the rules and regulations of the Commission. The documents containing the information specified in Part I of Form S-8 will be delivered to the recipients of those inducement stock option awards and restricted stock unit awards (collectively, the “Inducement Grants”) covered by this Registration Statement, as specified by Rule 428(b)(1) under the Securities Act of 1933, as amended.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

 

Item 3. Incorporation of Documents by Reference.

The following documents, which have been filed by the Company with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are incorporated herein by reference:

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All reports and other documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, other than Current Reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits furnished on such form that relate to such items, after the date of this registration statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part of this registration statement from the date of filing such reports and documents.

 

Any statement contained in a document incorporated by, or deemed incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement.

 

Item 4. Description of Securities.

Not applicable.

Item 5. Interests of Named Experts and Counsel.

Not applicable.

Item 6. Indemnification of Directors and Officers.

As permitted by Section 102 of the Delaware General Corporation Law, the Company has adopted provisions in its amended and restated certificate of incorporation and amended and restated bylaws, as amended, that limit or eliminate the personal liability of the Company’s directors for a breach of their fiduciary duty of care as a director. The duty of care generally requires that, when acting on behalf of the corporation, directors exercise an informed business judgment based on all material information reasonably available to them. Consequently, a director will not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for:

		any breach of the director’s duty of loyalty to the Company or its stockholders;

		any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

		any act related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or

		any transaction from which the director derived an improper personal benefit.

These limitations of liability do not affect the availability of equitable remedies such as injunctive relief or rescission. The Company’s amended and restated certificate of incorporation authorizes the Company to indemnify its officers, directors and other agents to the fullest extent permitted under Delaware law.

As permitted by Section 145 of the Delaware General Corporation Law, the Company’s amended and restated bylaws, as amended, provide that:

		the Company may indemnify its directors, officers, and employees to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions;

		the Company may advance expenses to its directors, officers and employees in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions; and

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		the rights provided in its bylaws are not exclusive.

The Company’s amended and restated certificate of incorporation provides that the Company will indemnify each person who was or is a party, or is or was threatened to be made a party, to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the Company) by reason of the fact that he or she is or was, or has agreed to become, a director or officer, or is or was serving, or has agreed to serve, at the Company’s request as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (all such persons being referred to as an “Indemnitee”), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding and any appeal therefrom, if such Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the Company’s best interests, and, with respect to any criminal action or proceeding, he or she had no reasonable cause to believe his or her conduct was unlawful. The Company’s amended and restated certificate of incorporation provides that the Company will indemnify any Indemnitee who was or is a party to an action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that the Indemnitee is or was, or has agreed to become, a director or officer, or is or was serving, or has agreed to serve, at the Company’s request as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees) and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding, and any appeal therefrom, if the Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the Company’s best interests, except that no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the Company, unless a court determines that, despite such adjudication but in view of all of the circumstances, he or she is entitled to indemnification of such expenses. Notwithstanding the foregoing, to the extent that any Indemnitee has been successful, on the merits or otherwise, he or she will be indemnified by the Company against all expenses (including attorneys’ fees) actually and reasonably incurred in connection therewith. Expenses must be advanced to an Indemnitee under certain circumstances.

 

The above discussion of the Company’s amended and restated certificate of incorporation, amended and restated bylaws, as amended, and Delaware law is not intended to be exhaustive and is respectively qualified in its entirety by such amended and restated certificate of incorporation, amended and restated bylaws, as amended, and applicable Delaware law.

The Company has entered into indemnification agreements with each of its directors and officers. These indemnification agreements may require the Company to, among other things, indemnify its directors and officers for certain expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of his or her service as one of the Company’s directors or officers, or any of its subsidiaries or any other company or enterprise to which the person provides services at the Company’s request.

The Company maintains standard policies of insurance that provide coverage for certain liabilities of directors and officers of the Company arising out of claims based on acts or omissions in their capacities as directors or officers.

To the extent that the Company’s directors and officers are indemnified under the provisions contained in the Company’s amended and restated bylaws, as amended, Delaware law or contractual arrangements against liabilities arising under the Securities Act, the Company has been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act, and is therefore unenforceable.

 

Item 7. Exemption from Registration Claimed.

Not applicable.

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Item 8. Exhibits.

				Incorporation by Reference
Exhibit Number		Exhibit Description		Form		Filing Date		Exhibit		Filed Herewith
4.1		Amended and Restated Certificate of Incorporation.		8-K/A		03/21/2018		3.1
4.2		Amended and Restated Bylaws, as amended.		8-K		02/06/2018		3.2
4.3		Certificate of Amendment to the Amended and Restated Bylaws of the Company, dated April 7, 2023.		8-K		04/07/2023		3.1
5.1		Opinion of Procopio, Cory, Hargreaves & Savitch LLP								X
23.1		Consent of Haskell & White LLP, independent registered public accounting firm								X
23.2		Consent of Procopio, Cory, Hargreaves & Savitch LLP (incorporated by reference to Exhibit 5.1 to this Registration Statement on Form S-8).								X
24.1		Power of Attorney (included on the signature page hereto)								X
99.1		One Stop Systems, Inc. Form of Employee Inducement Non-Statutory Stock Option Grant Notice and Agreement								X
99.2		One Stop Systems, Inc. Form of Employee Inducement Restricted Stock Unit Grant Notice and Agreement								X
107		Filing Fee Table								X

 

Item 9. Undertakings.

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provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Escondido, State of California, on August 18, 2023.

	ONE STOP SYSTEMS, INC. By:/s/ Michael Knowles     Michael Knowles     President and Chief Executive Officer

POWER OF ATTORNEY

 

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Michael Knowles and John Morrison as the undersigned’s true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution for such person and in such person’s name, place

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and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments, exhibits thereto, and other documents in connection therewith to this registration statement and any later registration statement filed by the registrant under Rule 462(b) of the Securities Act of 1933, as amended, which relates to this registration statement) and to file the same with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that each of said attorney-in-fact and agent, or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature		Title		Date
/s/ Michael Knowles		President and Chief Executive Officer (Principal Executive Officer)		August 18, 2023
Michael Knowles
/s/ John W. Morison Jr.		Chief Financial Officer (Principal Accounting and Financial Officer)		August 18, 2023
John W. Morison Jr.
/s/ Kenneth Potashner		Chairman		August 18, 2023
Kenneth Potashner
/s/ Kimberly Sentovich		Director		August 18, 2023
Kimberly Sentovich
/s/ Sita Lowman		Director		August 18, 2023
Sita Lowman
/s/ Jack Harrison		Director		August 18, 2023
Jack Harrison
/s/ Gioia Messinger		Director		August 18, 2023
Gioia Messinger
/s/ Greg Matz		Director		August 18, 2023
Greg Matz
/s/ David Raun		Director		August 18, 2023
David Raun

 

 

 

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Exhibit 5.1

	PROCOPIO 12544 High Bluff Drive Suite 400 San Diego, CA 92130 T. 858.720.6300 F. 619.235.0398
	DEL MAR HEIGHTS Las Vegas orange county SAN DIEGO SCOTTSDALE SILICON VALLEY washington d.c.

 

August 18, 2023

One Stop Systems, Inc.

2235 Enterprise Street #110

Escondido, California 92029

 

Re: One Stop Systems, Inc. - Registration Statement on Form S-8

 

Ladies and Gentlemen:

We have acted as counsel to One Stop Systems, Inc., a Delaware corporation (the “Company”), in connection with the filing with the U.S. Securities and Exchange Commission (the “Commission”) of a Registration Statement on Form S-8 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Act”), for the registration of 835,715 shares of common stock, $0.0001 par value per share (the “Shares”), of the Company, consisting of (i) 400,000 Shares issuable upon the exercise of non-qualified stock options (the “Inducement Options”) and (ii) 435,715 Shares issuable upon vesting and settlement of restricted stock units (the “Inducement RSUs,” and together with the Inducement Options, the “Inducement Awards”). The Inducement Awards were granted to certain employees of the Company outside of a stockholder approved equity incentive plan as an inducement material to entry into employment of such employees with the Company, in accordance with Nasdaq Listing Rule 5635(c)(4). This opinion is being furnished in connection with the requirements of Item 601(b)(5) of Regulation S-K under the Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or the related prospectuses, other than as expressly stated herein with respect to the issuance of the Shares.

We have examined the Registration Statement and exhibits thereto, related prospectuses, the agreements entered into in connection with the Inducement Awards (the “Inducement Award Agreements”), and such corporate records, documents, instruments and certificates of the

 

 

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One Stop Systems, Inc.

August 18, 2023

Page 2

 

 

 

Company, and have reviewed such other documents as we have deemed relevant under the circumstances. In such examination, we have assumed, without independent investigation, the authenticity of all documents submitted to us as originals, the genuineness of all signatures, the legal capacity of all natural persons, and the conformity of any documents submitted to us as copies to their respective originals. As to certain questions of fact material to this opinion, we have relied, without independent investigation, upon statements or certificates of public officials and officers of the Company. We are opining herein as to the General Corporation Law of the State of Delaware, and we express no opinion with respect to any other laws.

Based upon, and subject to, the foregoing, and assuming that (i) the Company reserves for issuance an adequate number of authorized and unissued shares of common stock, (ii) when issued, the Shares are duly registered on the books of the transfer agent and registrar therefor in the name or on behalf of the purchasers, (iii) each individual Inducement Award has been duly authorized by all necessary corporate action and duly issued, granted or awarded and exercised or vested and settled, as applicable, in accordance with the requirements of applicable law and the Inducement Award Agreements, and (iv) in the case of the Inducement Options, the consideration required to be paid in connection with the issuance and sale of the Shares upon exercise of the Inducement Options is actually received by the Company as provided pursuant to the relevant Inducement Award Agreements, we are of the opinion that the Shares, when issued in accordance with Inducement the Award Agreements, will be validly issued, fully paid and non-assessable.

We consent to your filing this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.

Very truly yours,

/s/ Procopio, Cory, Hargreaves & Savitch LLP

Procopio, Cory, Hargreaves & Savitch LLP

 

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Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in this Registration Statement on Form S-8 of One Stop Systems, Inc. (the “Company”) of our report dated March 23, 2023, relating to our audits of the Company’s consolidated financial statements as of December 31, 2022 and 2021, and for each of the years ended December 31, 2022 and 2021, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

/s/ Haskell & White LLP

 

Irvine, California

August 18, 2023

 

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Exhibit 99.1

One Stop Systems, Inc.
Stock Option Grant Notice
Inducement Grant

FOR GOOD AND VALUABLE CONSIDERATION, One Stop Systems, Inc. (the “Company”), hereby grants to the Optionee named below, a stock option (the “Option”) to purchase any part or all of the specified number of shares of its Common Stock (“Option Shares”), upon the terms and subject to the conditions set forth in that Employment Agreement entered into by and between the Company and the Optionee named below on [DATE] (the “Employment Agreement”) and this Stock Option Grant Notice (the “Grant Notice”), at the specified purchase price per share without commission or other charge. The Option has been granted as an “inducement” award under the Nasdaq Listing Rule 5635(c)(4) pursuant to the Employment Agreement and the Stock Option Agreement (the “Option Agreement”) attached hereto, and has been granted outside of the Company’s 2017 Equity Incentive Plan (as may be amended from time to time, the “Plan”) or any other established equity incentive plan of the Company. Notwithstanding the foregoing, the Option shall be subject to the same terms as set forth in the Plan and will be governed in all respects as though it were issued under the Plan, and unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Notice.

Optionee:
Date of Grant:
Vesting Commencement Date:
Number of Option Shares:
Exercise Price (Per Share):	$
Expiration Date:	Ten years after Date of Grant

 By cash or check

 By net exercise, if the Company has established procedures for net exercise

 

[signature page follows]

 

 

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Further, by their signatures below, the Company and the Optionee agree that the Option is governed by this Grant Notice, the Employment Agreement, and by the provisions of the Plan (despite the fact that the Option was granted outside of the Plan) and Option Agreement, both of which are attached to and made a part of this Grant Notice. Optionee acknowledges receipt of copies of the Plan and the Option Agreement, represents that the Optionee has read and is familiar with their provisions, and hereby accepts the Option subject to all of their terms and conditions. Optionee further acknowledges that, as of the Date of Grant, this Grant Notice, the Employment Agreement, the Option Agreement and the Plan set forth the entire understanding between Optionee and the Company regarding the Option and supersede all prior oral and written agreements on that subject.

One Stop Systems, Inc. By:        [Name, Title]     Date:	Optionee: [NAME]   Signature   Date:

Attachments: (I) Option Agreement; (II) 2017 Equity Incentive Plan, as amended; and (III) Notice of Exercise

 

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Attachment I

Stock Option Agreement

(Nonstatutory Stock Option)

Inducement Grant

Effective as of October 10, 2017

Pursuant to that Employment Agreement entered into by and between the Company and the Optionee on [DATE] (the “Employment Agreement”), the Stock Option Grant Notice (“Grant Notice”) and this Option Agreement (“Option Agreement”), One Stop Systems, Inc., a Delaware corporation (the “Company”), has granted to Optionee an option to purchase the number of shares of the Company’s Common Stock indicated in Optionee’s Grant Notice, at the exercise price indicated in such Grant Notice. The Option has been granted as an “inducement” award under the Nasdaq Listing Rule 5635(c)(4), and has been granted outside of the Company’s 2017 Equity Incentive Plan (as may be amended from time to time, the “Plan”) or any other established equity incentive plan of the Company. Notwithstanding the foregoing, the Option shall be subject to the same terms as set forth in the Plan and will be governed in all respects as though it were issued under the Plan. This Option Agreement is incorporated by reference into and made a part of the Grant Notice. Whenever capitalized terms are used in this Option Agreement, they shall have the meaning specified (i) in the Plan, (ii) in the relevant Grant Notice, or (iii) below, unless the context clearly indicates to the contrary.

The details of the Option granted to Optionee are as follows:

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Attachment II

2017 Equity Incentive Plan

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Attachment III

Notice Of Exercise

One Stop Systems, Inc.

2235 Enterprise Street, Suite #110

Escondido, CA 92029

 

Date of Exercise: _______________

Ladies and Gentlemen:

This constitutes notice under my stock option that I elect to purchase the number of shares for the price set forth below.

Type of option (check one):	Nonstatutory 
Stock option dated:	_______________
Number of shares as to which option is exercised:	_______________
Certificates to be issued in name of:	_______________
Total exercise price:	$______________
Cash or check payment delivered herewith:	$______________

By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the Company’s 2017 Equity Incentive Plan, as may be amended from time to time, and (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option.

I acknowledge that all certificates representing any of the shares of Common Stock issued upon exercise of this Option shall have endorsed thereon appropriate legends reflecting restrictions pursuant to the Option Agreement, the Company’s Amended and Restated Certificate of Incorporation, Bylaws, as amended, and/or applicable securities laws.

Very truly yours,

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Exhibit 99.2

One Stop Systems, Inc.
Restricted Stock Unit Notice of Grant
Inducement Grant

FOR GOOD AND VALUABLE CONSIDERATION, One Stop Systems, Inc., a Delaware corporation (the “Company”), hereby grants to the Participant named below, an Award of Restricted Stock Units (the “RSU Award”), upon the terms and subject to the conditions set forth in that Employment Agreement entered into by and between the Company and the Participant named below on [DATE] (the “Employment Agreement”) and this Restricted Stock Unit Notice of Grant (the “Grant Notice”). The RSU Award has been granted as an “inducement” award under the Nasdaq Listing Rule 5635(c)(4) pursuant to the Employment Agreement and the Restricted Stock Unit Award Agreement (the “RSU Award Agreement”) attached hereto, and has been granted outside of the Company’s 2017 Equity Incentive Plan (as may be amended from time to time, the “Plan”) or any other established equity incentive plan of the Company. Notwithstanding the foregoing, the RSU Award shall be subject to the same terms as set forth in the Plan and will be governed in all respects as though it were issued under the Plan, and unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Notice.

Participant:
Date of Grant:
Vesting Commencement Date:
Number of Restricted Stock Units:
Grant Date Price:	$

 

Vesting Schedule: The Restricted Stock Units will vest in accordance with the following schedule:

Except as otherwise provided in the Employment Agreement or RSU Award Agreement, One fourth (1/4) of the Restricted Stock Units will vest on the one (1)-year anniversary of the Vesting Commencement Date (the “One-Year Cliff Vest”), and one eighth (1/8) of the Restricted Stock Units will vest every six (6) months after the One-Year Cliff Vest, such that the Restricted Stock Units will be fully vested on the fourth (4th) anniversary of the Vesting Commencement Date; provided, however, that there has not been a Termination of Service as of each such date.

Additional Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and understands and agrees to, this Grant Notice, the RSU Award Agreement, and the Plan.

Further, by their signatures below, the Company and the Participant agree that the RSU Award is governed by this Grant Notice, the Employment Agreement, and by the provisions of the Plan (despite the fact that the RSU Award was granted outside of the Plan) and RSU Award Agreement, both of which are attached to and made a part of this Grant Notice. Participant acknowledges receipt of copies of the Plan and the RSU Award Agreement, represents that the Participant has read and is familiar with their provisions, and hereby accepts the RSU Award subject to all of their terms and conditions. Participant further acknowledges that, as of the Date of Grant, this Grant Notice, the Employment Agreement, the RSU Award Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the RSU Award Company and supersede all prior oral and written agreements on that subject.

[Signatures on following page]

 

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One Stop Systems, Inc.   By:        [Name, Title]   Date:	Participant: [NAME]     Signature   Date:   Address:

 

 

Attachments: (I) Restricted Stock Unit Award Agreement; and (II) 2017 Equity Incentive Plan, as amended

 

 

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Attachment I

 

One Stop Systems, Inc.
Restricted Stock Unit Award Agreement

Inducement Grant

As reflected by the Restricted Stock Unit Notice of Grant (“Grant Notice”), and pursuant to that Employment Agreement entered into by and between the Company and the Participant on [DATE] (the “Employment Agreement”), the Grant Notice and this Restricted Stock Unit Award Agreement (the “Award Agreement”), One Stop Systems, Inc., a Delaware corporation (the “Company”) has granted to Participant an RSU Award for the number of restricted stock units as indicated in the Grant Notice (the “RSU Award”). The RSU Award has been granted as an “inducement” award under the Nasdaq Listing Rule 5635(c)(4), and has been granted outside of the Company’s 2017 Equity Incentive Plan (as may be amended from time to time, the “Plan”) or any other established equity incentive plan of the Company. Notwithstanding the foregoing, the RSU Award shall be subject to the same terms as set forth in the Plan and will be governed in all respects as though it were issued under the Plan. The terms of the RSU Award as specified in the Grant Notice, the Employment Agreement and this Restricted Stock Unit Award Agreement constitute the “Award Agreement.” Defined terms not explicitly defined herein but defined in the Grant Notice or the Plan shall have the same definitions as in the Grant Notice or Plan, as applicable.

The general terms applicable to the RSU Award are as follows:

1. Governing Plan Documents. Participant’s RSU Award is subject to all the provisions of the Plan, including but not limited to the provisions in:

(a) Section 7(c) of the Plan regarding the award, issuance and settlement of Restricted Stock Units;

(b) Section 12 of the Plan regarding adjustments upon a Change in Control; and

(c) Section 15(b) of the Plan regarding the Company’s retained rights to terminate Participant’s employment or other services to the Company notwithstanding the grant of the RSU Award.

The RSU Award is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the RSU Award Agreement and the provisions of the Plan, the provisions of the RSU Award Agreement shall control.

2. Grant of RSU Award. This RSU Award represents Participant’s right to be issued on a future date the number of shares of the Company’s Common Stock that is equal to the number of restricted stock units indicated in the Grant Notice, subject to any adjustments as provided in the Plan and Participant’s satisfaction of the vesting conditions set forth therein (the “Restricted Stock Units”). Any additional Restricted Stock Units that become subject to the RSU Award as set forth in the Plan and the provisions of Section 4 below, if any, shall be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Restricted Stock Units covered by the RSU Award.

3. Vesting. Participant’s Restricted Stock Units will vest, if at all, in accordance with the vesting schedule provided in the Grant Notice, subject to the provisions contained herein and the terms of the Plan. Except as otherwise set forth in the Employment Agreement, vesting will cease upon a Termination of Services.

 

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4. Dividends. Except as may otherwise be provided in the Plan, Participant may become entitled to receive payments equal to any cash dividends and other distributions paid with respect to a corresponding number of shares of Common Stock to be issued in respect of the Restricted Stock Units covered by the RSU Award. Any such dividends or distributions shall be subject to the same forfeiture restrictions as apply to the Restricted Stock Units and shall be paid at the same time that the corresponding shares are issued in respect of Participant’s vested Restricted Stock Units, provided, however that to the extent any such dividends or distributions are paid in shares of Common Stock, then Participant will automatically be granted a corresponding number of additional Restricted Stock Units subject to the RSU Award (the “Dividend Units”), and further provided that such Dividend Units shall be subject to the same forfeiture restrictions and restrictions on transferability, and same timing requirements for issuance of shares, as apply to the Restricted Stock Units subject to the RSU Award with respect to which the Dividend Units relate.

5. Withholding Obligations. As further provided in Section 15(d) of the Plan, the Company shall have the right to withhold or otherwise require Participant to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements (the “Withholding Obligation”) prior to delivery of any Common Stock in respect of the RSU Award. In the event the that the amount of the Withholding Obligation is greater than the amount withheld by the Company, Participant agrees to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount.

6. Date of Issuance.

(a) The issuance of shares in respect of the Restricted Stock Units is intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner. Subject to the satisfaction of the Withholding Obligation, if any, in the event one or more Restricted Stock Units vests, the Company shall issue to Participant one (1) share of Common Stock for each Restricted Stock Unit that vests on the applicable vesting date(s) (subject to any adjustment under Section 4 above, and subject to any different provisions in the Grant Notice). Each issuance date determined by this paragraph is referred to as an “Original Issuance Date.”

(b) If the Original Issuance Date falls on a date that is not a business day, delivery shall instead occur on the next following business day.

(c) In addition, if:

(i) the Original Issuance Date does not occur (1) during an “open window period” applicable to Participant, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when Participant is otherwise permitted to sell shares of Common Stock on an established stock exchange or stock market (including but not limited to under a previously established written trading plan that meets the requirements of Rule 10b5-1 under the Exchange Act and was entered into in compliance with the Company’s policies (a “10b5-1 Arrangement)), and

(ii) either (1) a Withholding Obligation does not apply, or (2) the Company decides, prior to the Original Issuance Date, (A) not to satisfy the Withholding Obligation by withholding shares of Common Stock from the shares otherwise due, on the Original Issuance Date, to Participant under this Award, and (B) not to permit Participant to enter into a “same day sale” commitment with a broker-dealer (including but not limited to a commitment under a 10b5-1 Arrangement) and (C) not to permit Participant to pay the Withholding Obligation in cash,

(iii) then the shares that would otherwise be issued to Participant on the Original Issuance Date will not be delivered on such Original Issuance Date and will instead be delivered

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on the first business day when Participant is not prohibited from selling shares of the Company’s Common Stock in the open public market or on such other date determined by the Company, but in no event later than December 31 of the calendar year in which the Original Issuance Date occurs (that is, the last day of Participant’s taxable year in which the Original Issuance Date occurs), or, if and only if permitted in a manner that complies with Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the applicable year following the year in which the shares of Common Stock under this Award are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d).

7. Transferability. Except as otherwise provided in the Plan, Participant’s RSU Award is not transferable, except by will or by the applicable laws of descent and distribution.

8. Company Not Liable for Taxes. As a condition to accepting the RSU Award, Participant hereby (a) agrees to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from the RSU Award or other Company compensation and (b) acknowledges that Participant was advised to consult with Participant’s own personal tax, financial and other legal advisors regarding the tax consequences of the RSU Award and have either done so or knowingly and voluntarily declined to do so.

9. Miscellaneous.

(a) This Award Agreement shall bind and inure to the benefit of the parties’ heirs, legal representatives, successors and permitted assigns.

(b) The Employment Agreement, this Award Agreement, the Grant Notice and the Plan, constitute the entire agreement between the parties pertaining to the subject matter contained herein and they supersede all prior and contemporaneous agreements, representations and understandings of the parties with respect to the subject matter hereof. No supplement, modification or amendment of this Award Agreement shall be binding unless executed in writing by all of the parties. No waiver of any of the provisions of this Award Agreement shall be deemed or shall constitute a waiver of any other provisions, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. In the event there exists any conflict or discrepancy between any of the terms in the Plan and this Award Agreement, the terms of this Award Agreement shall be controlling. A copy of the Plan has been delivered to Participant and also may be inspected by Participant at the principal office of the Company.

(c) Should any portion of the Employment Agreement, the Plan, the Grant Notice or this Award Agreement be declared invalid and unenforceable, then such portion shall be deemed to be severable from this Award Agreement and shall not affect the remainder hereof.

(d) All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) three (3) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iii) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt; or (iv) the same day if sent via electronic means (including via fax or email) before close of business on that day, or the next business day if sent on a weekend or after close of business on that day. All communications shall be sent to the Company at its principal executive office, and to Participant at the address set forth in the Company’s records, or at such other address as the Company or Participant may designate by ten (10) days advance written notice to the other party hereto.

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(e) This Award Agreement shall be construed according to the laws of the State of Delaware.

 

[Remainder of Page Intentionally Left Blank]

 

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Attachment II

2017 Equity Incentive Plan

 

 

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Exhibit 107

Calculation of Filing Fee Tables

Form S-8 (Form Type)

One Stop Systems, Inc.

(Exact Name of Registrant as Specified in its Charter)

Table 1: Newly Registered Securities

 

 

		Security Type				Security Class Title				Fee Calculation or Carry Forward Rule				Amount Registered(1)				Proposed Maximum Offering Price Per Share				Proposed Maximum Aggregate Offering Price				Fee Rate				Amount of Registration Fee
Newly Registered Securities
Fees to be Paid			Equity				Common Stock, par value $0.0001 per share, reserved for issuance pursuant to Non-Qualified Stock Option Awards (Inducement Grants)				Rule 457(h)				400,000(2)				$2.95(2)				1,180,000.00				$0.00011020				$130.04
			Equity				Common Stock, par value $0.0001 per share, reserved for issuance pursuant to Restricted Stock Unit Awards (Inducement Grants)				Rule 457(h); Rule 457(c)				435,715(3)				$1.77(4)				771,215.55				$0.00011020				$84.99
Fees Previously Paid
Carry Forward Securities
Carry Forward Securities
			Total Offering Amounts																				$1,951,215.55				$0.00011020				$215.03
			Total Fees Previously Paid																								—				—
			Total Fees Offsets																								—				—
			Net Fee Due																												$215.03

 

 

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	(1)	In accordance with Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), this registration statement shall be deemed to cover any additional securities that may from time to time be offered or issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.

 

	(2)	Represents shares of common stock of the Registrant issuable upon the exercise of outstanding non-qualified stock option awards granted to Michael Knowles, the Registrant’s recently-appointed President and Chief Executive Officer, on June 5, 2023, outside of the Registrant’s Amended and Restated 2017 Equity Incentive Plan (the “2017 Plan”) as an inducement material to entry into employment with the Registrant, in accordance with Nasdaq Listing Rule 5635(c)(4) (the “Inducement Option Awards”). The Inducement Option Awards have an exercise price of $2.95 per share.

 

	(3)	Represents 400,000 shares of common stock of the Registrant issuable upon vesting and settlement of Restricted Stock Units (“RSUs”) granted to M. Knowles on June 5, 2023 and 35,715 shares of common stock of the Registrant issuable upon vesting and settlement of RSUs granted to Robert Kalebaugh, the Registrant’s recently-appointed Vice President of Sales, on July 17, 2023 (collectively, the “Inducement RSU Awards”). In each case, such Inducement RSU Awards were granted outside of the Registrant’s 2017 Plan as an inducement material to entry into employment with the Registrant, in accordance with Nasdaq Listing Rule 5635(c)(4).
	(4)	The proposed maximum offering price per share is calculated in accordance with Rules 457(c) and 457(h) under the Securities Act, solely for purposes of calculating the registration fee on the basis of $1.77 per share, the average of the high and low price of the Registrant’s common stock as reported on the Nasdaq Capital Market on August 16, 2023.

 

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