SecProbe.io

Mail Stop 4561
December  6, 2017

Steve Cooper
Chief Executive Officer
One Stop Systems, Inc.
2235 Enterprise Street #110
Escondido, CA 92029

Re: One Stop Systems, Inc.
Confidential Draft Registration Statement on Form S -1
  Submitted November 9, 2017
  CIK No. 0001394056

Dear Mr. Cooper:

We have reviewed your draft registration statement and have the following comments. In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosure.

Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR.  If you do  not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

General

1. According to your preliminary fee table and disclosure on page 105, it appears that you
will issue  warrants to your underwriter, Roth Capital Partners, and seek to register these
warrants and common stock underlying these warrants as part of your initial public
offering registration statement.  If true, please revise your prospectus cover page and
offering summary to clarify the issuance and registration of these warrants and
underlying common stock.

2. We note that you intend to reincorporate from being a California corporation into a
Delaware corporation in connection with your offering.  Where appropri ate, please
clarify any procedural or transactional steps needed to accomplish this reincorporation
and whether it will be completed prior to the effectiveness of this registration statement.

Steve Cooper
One Stop Systems, Inc.
December 6, 2017
Page 2

 Risk Factors

A limited amount of customers represent a signi ficant portion of our sales …, page 13

3. Please revise to identify your largest customer that represented 29% of your net sales for
the year ended December 31, 2016.  In the Business section, disclose the material terms
of you agreement with this significan t customer, including any termination provisions or
minimum purchase commitments.  Refer to Item  101(c)(1)(vii) of Regulation S -K for
further guidance.

We rely on a limited number of parts suppliers to support our manufacturing…, page 13

4. Please identify the two suppliers who accounted for approximately 46% of the materials
purchased by the company in 2016 and provide a summary of the material terms of any
agreements with these suppliers.

We have identified material weaknesses in our internal control over financial reporting…,
page 17

5. Please disclose the steps you have taken  to remediate the material weaknesses  in your
internal control over financial reporting  and what remains to be completed in your
remediation plan, if anything.  Al so, disclose how long you estimate it will take to
complete your plan and any material costs you have, or expect to be, incurred.

If our involvement in a September 2017 CIO Review Article was held to be in violation…,
page 26

6. You provide an update to a financial measure included  in the September 2017 CIO
Review article , which  quotes your CEO Steve Cooper that you are “emerging at a 58%
growth margin annually .”  Please revise to explain what you mean by “growth margin
annually” and disclose the period in which the 58% growth margin relates.

Use of Proceeds, page 29

7. Please identify the lenders for any related party indebtedness.  Also, disclose how the
company used the loans that were incurred over the past year and will be repaid using the
proceeds of th is offering.  See Instruction 4 of Item 504 of Regulation S -K.

Capitalization, page  30

8. Please revise your pro forma as adjusted information to reflect the repayment of debt with
the proceeds from this offering.

Steve Cooper
One Stop Systems, Inc.
December 6, 2017
Page 3

 Management’s Discussion and Analysis of  Financial Condition and Results or Operations

Business Developments , page 34

9. Please revise to describe the material terms of your agreements to acquire the source code
license to the Ion flash array software from Western Digital and service their existing
customer base.  For example, clarify if any consideration was paid to Western  Digital or
if Western Digital will receive a commission, royalties or any revenue sharing from these
arrangements.

Liquidity and Capital Resources, page 44

10. You disclose that you were not in compliance with certain financial and non -financial
covenants  as of June 30, 2017 and December 31, 2016 , but that you received waivers.
Please specify the covenants with which you were not in compliance and  the expiration
date of the waivers.  State in quantitative terms the extent of such noncompliance with
respec t to each covenant in each reporting period.  S ee Sections I.D and IV.C of the SEC
Interpretive Release No. 33 -8350.  In a risk factor, also disclose the impact of not
meeting these covenants on your borrowing capacity under the agreement.

Business

Our Opportunity, page 61

11. Please clarify whether you have generated any material amounts of revenue from your
Custom Built Servers, Cloud Services or Storage Management Services lines of business.

Competition, page 70

12. Please revise to describe your competition outside of your OEM customers performing
similar services in -house.  We note that on pages 12 and 13 you reference established
competitors, third party competitive products, and ne w entrants to the your market.

Management, page 73

13. You disclo se that you have two executive officers, CEO Steve Cooper and CFO John W.
Morrison, Jr.  On your website you list six other members of your management, including
a senior vice president and five vice presidents.  Please advise us whether you have any
addit ional executive officers, as defined by Rule 405 of Regulation C.  To the extent any
of these officers are a vice president in charge of a principal business unit, division or
function (such as sales, administration or finance), or any other officer who pe rforms a
policy making function or any other person who performs similar policy making
functions for the registrant, please provide the disclosure required by Item 401(e) of
Regulation S -K.

Steve Cooper
One Stop Systems, Inc.
December 6, 2017
Page 4

 Executive Compensation, page 79

14. You reference that your summary compensation table includes your principal executive
officer and two other most highly compensated executive officers.  We note, however,
your compensation tables only include two named executive officers, Steve Cooper and
Mark Gunn.  Please revise  to include a third named executive officer if their
compensation exceeded $100,000 in 2016.  Refer to Item 402(m)(2) of Regulation S -K
for further guidance.

Certain Relationships and Related Party Transactions, pa ge 91

15. Please revise to include any perso nal loan guarantees made by members of your
management or principal stockholders.  We note several notes or loans were guaranteed
by your CEO and you reference a stockholder personal guarantee on page F -65.

Principal Shareholders, page 93

16. Please clarify whether your beneficial ownership table includes Series A, B and C
Preferred Stock holders on an as -converted basis.  To the extent any of your preferred
stockholders beneficial ly owns more than 5% of your common stock on an as -converted
basis,  please disc lose them as principal stockholders pursuant to Rule 13d -3.

17. Please provide an address for your shareholder, Park Bank , and ident ify the natural
persons who  have  voting/investment power over its shares beneficially owned.

Consolidated Financial Statement s

Consolidated Statements of Operations, page F -4

18. Please revise to present pro forma net (loss) income per share information for only the
latest year and subsequent interim period.

Notes to Consolidated Financial Statements

Note 1.  Summary of Significant Accounting Policies

Revenue Recognition, page F -10

19. You disclose that one of your arrangements includes a vendor managed inventory
program containing “bill and hold” terms and revenue is recognized when an order is
completed.  Please tell us how you considered the guidance in SAB Topic 13.A.3.a.  in
accounting for these transactions.  At a minimum, your response should address the
business purpose for these arrangements; when delivery will be made and when payment
is due.

Steve Cooper
One Stop Systems, Inc.
December 6, 2017
Page 5

20. You disclose on page  F-59 that Magma’s policy was to recognize revenue from product
sales upon shipment and transfer of ownership to the customer, unless the customer had
full right of return, in which case revenue was deferred until title passed to the end user.
Please clar ify who the customer and end -users are in these transactions.  In this regard, it
is unclear how transfer of ownership to the customer and title passing to the end -users
differ.  Also, t o the extent refund provisions are included in arrangements entered in to
after the Magma acquisition, revise your policy to include a discussion of such return
rights.

Note 2.  Acquisition, page F -14

21. Please provide the disclosures required by ASC 350 -30-50-1 and 50 -2 for your intangible
assets.

22. You state that the fai r value of shares issued in the Magma acquisition was based on an
independent valuation of the company.  To the extent you relied upon a third -party
valuation  specialist, please disclose the name  of the specialist and include  the expert's
consent  pursuant to Securities Act Rule 436(b) of Regulation C.  Alternatively, clarify
your reference to independent valuation.  See also Question 141.02 of our Compliance
and Disclosure Interpretations on Securities Act Sections for additional guidance.

Note 16.  Subs equent Events, page F -29

23. We note that you acquired a license agreement, members of the software design team and
equipment from Western Digital.  Please explain further the terms of these arrangements,
including the consideration paid.  Also, tell us how y ou are accounting for these
transactions and specifically address your consideration of ASC 805 -10-55-4 through 55
and Rule 11 -01(d) of Regulation S -X.

Condensed Consolidated Financial Statements (Unaudited)

Notes to Condensed Consolidated Financial St atements (Unaudited)

Note 1 .  Summary of Significant Accounting Policies

Principles of Consolidation, page F -35

24. Please clarify whether SkyScale is a variable interest entity for which you are the primary
beneficiary.  If so, revise to disclose the information required by ASC 810 -10-50-2AA
and ASC 810 -10-50-3 or explain how you determined this is not a variable inter est entity.

Steve Cooper
One Stop Systems, Inc.
December 6, 2017
Page 6

 Note 8.  Stockholders’ Equity

Stock Options, page F -46

25. Please provide us with a breakdown of all stock options granted to date in fiscal 2017,
and include the fair value of the underlying common stock used to value such awards as
determin ed by your board of directors.  To the extent there were any significant
fluctuations in the fair values from period -to-period, describe for us the factors that
contributed to these fluctuations, including any intervening events within the company or
chang es in your valuation assumptions or methodology .

Exhibits

26. Please file your Investors’ Rights Agreement, as amended and filed as Exhibit 4.2, in its
entirety.  We note that you omit ted attachments Exhibits A and B.

General

27. Please supplementally provid e us with copies of all written communications, as defined
in Rule 405 under the Securities Act, that you, or anyone authorized to do so on your
behalf, present to potential investors in reliance on Section 5(d) of the Securities Act,
whether or not they r etain copies of the communications.

28. We note that you reference reports by Intersect 360 Research for HPC industry statistics
on pages 1, 56, 61 and 62 of your prospectus.  Please clarify whether you commissioned
these reports.

You may contact David Edg ar, Staff Accountant, at (202) 551 -3459 or Kathleen Collins,
Accounting Branch Chief, at (202) 551 -3499 if you have questions regarding comments on the
financial statements and related matters.  Please contact Edwin Kim, Staff Attorney, at (202)
551-3297 o r me at (202) 551 -3453 with any other questions.

Sincerely,

 /s/ Jan Woo

 Jan Woo
 Branch Chief - Legal
Office of Information
        Technologies and Services

cc: Dennis J. Doucette, Esq.
Procopio , Cory, Hargreaves & Savitch LLP