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Significant Accounting Policies (Policies) | 6 Months Ended
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Jun. 30, 2023
Accounting Policies [Abstract] |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared on an accrual basis of accounting in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”), as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). The unaudited consolidated financial statements herein have been prepared by the Company pursuant to the rules and regulations of the SEC. The accompanying interim unaudited consolidated financial statements have been prepared under the presumption that users of the interim financial information have either read or have access to the audited consolidated financial statements for the latest year ended December 31, 2022. Accordingly, note disclosures which would substantially duplicate the disclosures contained in the December 31, 2022 audited consolidated financial statements have been omitted from these interim unaudited consolidated financial statements. The Company’s management has evaluated all subsequent events and transactions through the date of filing this Quarterly Report. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements. Operating results for the three and six month periods ended June 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. For further information, refer to the audited consolidated financial statements and notes for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 23, 2023.
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of OSS, which include the operating results of its wholly owned subsidiary, OSS GmbH, and its wholly owned subsidiary OSS Europe. Intercompany balances and transactions have been eliminated in consolidation.
Measurement of Credit Losses on Financial Instruments | Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, which sets out the principles for the recognition of measurement of credit losses on financial instruments. This standard provides guidance on the impairment of financial instruments that is based on expected losses rather than probable or incurred losses. Under this new guidance, the Company will recognize, as an allowance, our estimate of expected credit losses based upon historical and current information, and reasonable and supportable forecasts of future events and circumstances, as well as estimates of prepayments. Under this model, we are required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. Accounts receivable have been reduced by an allowance for doubtful accounts. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable after considering current market conditions and supportable forecasts when appropriate. This estimate is a result of management's evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations. The Company shall recognize an allowance for credit losses rather than a reduction to the carrying value of the asset for debt securities. To determine credit losses, we employ a systematic methodology that considers available quantitative and qualitative evidence. In addition, we consider specific adverse conditions related to the financial health of, and business outlook for, the investee. Upon adoption of this standard on January 1, 2023, there was no immediate material impact to the Company's consolidated financial position, results of operations or cash flows. On an ongoing basis, the Company will contemplate forward-looking economic conditions in recording lifetime expected credit losses for the Company’s financial assets measured at cost, such as the Company’s trade receivables and certain short-term investments.
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. On an ongoing basis, our management evaluates these estimates and assumptions, including those related to determination of standalone selling prices of our products and services, allowance for doubtful account and sales reserves, income tax valuations, stock-based compensation, goodwill, intangible assets and inventory valuations and recoverability. We base our estimates on historical data and experience, as well as various other factors that our management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities.
Goodwill | Goodwill Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment at least annually or when we deem that a triggering event has occurred. The Company reviews the impairment of goodwill for impairment annually at yearend. The Company completed its annual assessment for goodwill impairment and determined that goodwill is not impaired as of December 31, 2022 and no adjustment was required. In June 2023, the Company performed an interim impairment test of goodwill, as a result of the overall financial performance of OSS Classic as compared to plan, the transition of and focus on our product strategy of AI Transportables and the defense industry, deferment of certain orders. As a result of this interim evaluation, the Company recorded an impairment loss to goodwill of $2,700,000, which was charged to operating expenses in the current period. Due to the COVID-19 pandemic, Ukraine war, inflationary pressures, other macroeconomic factors, the loss of our media and entertainment customer (which has historically been one of our largest customers), there has been uncertainty and disruption in the global economy, financial markets and our ongoing operations. We are not aware of any specific event or circumstance that would require an update to our estimates or assumptions or a revision of the carrying value of our assets or liabilities as of the date of this Quarterly Report. These estimates and assumptions may change as new events occur and additional information is obtained. As a result, actual results could differ materially from these estimates and assumptions.
Recent Accounting Pronouncements | Recent Accounting Pronouncements Management has evaluated recent accounting pronouncements through the date of these consolidated financial statements and believes that the are no recent accounting pronouncements that will have a material impact on the Company's financial statements.
Employee Retention Credit | Employee Retention Credit On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") to provide certain relief as a result of the COVID-19 pandemic. The CARES Act provides tax relief, along with other stimulus measures, including a provision for an Employee Retention Credit (“ERC”) The ERC was designed to encourage businesses to keep employees on the payroll during the COVID-19 pandemic. As there is no authoritative guidance under U.S. GAAP on accounting for government assistance to for-profit business entities, we accounted for the ERC funding consistent with our accounting treatment and reporting of the forgiveness of our Paycheck Protection Program ("PPP") Loan. The credit is based upon the number of employees in any given quarter in years 2020 and 2021. For the year 2020, the maximum credit is based upon the lesser of 50% of eligible wages or $5,000 for the year. For the first three quarters only of the year 2021, the maximum quarterly credit is based upon the lesser of 70% of eligible wages or $7,000 per quarter. The total maximum program credit per employee is $26,000. The Company applied for the ERC program and as of June 30, 2023, has received $1,516,034 in credits, including interest, and paid commissions of $217,793 to a vendor who assisted with the calculations and filing of the application. The net proceeds of $1,298,241 have been reported as other income in the accompanying consolidated statements of operations. Income is recognized when reasonably assured of receipt based upon notice.

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- Definition Disclosure of accounting policy for basis of accounting, or basis of presentation, used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). + References No definition available. + Details
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- Definition Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 4 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126899994&loc=d3e18823-107790 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=109239629&loc=d3e5614-111684 + Details
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- Definition Disclosure of accounting policy for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security. Includes, but is not limited to, methodology used to estimate allowance for credit loss, how writeoff of uncollectible amount is recognized, and determination of past due status and nonaccrual status. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 30 -Section 35 -Paragraph 7A -URI https://asc.fasb.org/extlink&oid=125515542&loc=SL120269220-210453 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 3D -URI https://asc.fasb.org/extlink&oid=124255953&loc=SL120267969-210447 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 30 -Section 50 -Paragraph 7 -URI https://asc.fasb.org/extlink&oid=124269663&loc=SL82922895-210455 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 30 -Section 35 -Paragraph 13A -URI https://asc.fasb.org/extlink&oid=125515542&loc=SL120267917-210453 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 35 -Paragraph 8A -URI https://asc.fasb.org/extlink&oid=124266218&loc=SL120267834-210445 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 30 -Paragraph 4A -URI https://asc.fasb.org/extlink&oid=124256539&loc=SL120269210-210444 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 17 -URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919260-210447 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 45 -Paragraph 5 -URI https://asc.fasb.org/extlink&oid=124255206&loc=SL120267845-210446 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919253-210447 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919272-210447 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 30 -Paragraph 5A -URI https://asc.fasb.org/extlink&oid=124256539&loc=SL120254536-210444 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 3C -URI https://asc.fasb.org/extlink&oid=124255953&loc=SL120267966-210447 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 30 -Section 30 -Paragraph 1B -URI https://asc.fasb.org/extlink&oid=124268681&loc=SL120267897-210452 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section 50 -Paragraph 11 -URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919244-210447 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 30 -Section 50 -Paragraph 3D -URI https://asc.fasb.org/extlink&oid=124269663&loc=SL120267862-210455 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 20 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.M.Q4) -URI https://asc.fasb.org/extlink&oid=122651532&loc=SL122037091-237805 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 30 -Section 50 -Paragraph 3C -URI https://asc.fasb.org/extlink&oid=124269663&loc=SL120267859-210455 Reference 18: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 326 -SubTopic 30 -Section 50 -Paragraph 3A -URI https://asc.fasb.org/extlink&oid=124269663&loc=SL120267853-210455 + Details
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- Definition Disclosure of accounting policy for goodwill. This accounting policy also may address how an entity assesses and measures impairment of goodwill, how reporting units are determined, how goodwill is allocated to such units, and how the fair values of the reporting units are determined. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13854-109267 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2144439 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 55 -Paragraph 24 -URI https://asc.fasb.org/extlink&oid=122137925&loc=d3e14258-109268 + Details
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